(MENAFN) The cocoa market is facing significant challenges as traders grapple with widespread shortages of beans and escalating costs associated with securing long-term supply contracts. Across the New York and London Stock Exchanges, prices of the most active futures contracts for delivery this month experienced a notable decline of over 25 percent, followed by a swift rebound, reflecting the mounting difficulties encountered by farmers and buyers worldwide due to the supply shortage.
This volatility in prices has led to a substantial increase of over USD3,000 per ton compared to contracts for delivery in the future, as traders scramble to secure a dependable source of cocoa beans. The sharp fluctuations and wide disparities in prices underscore the intense pressure and uncertainty prevailing in the cocoa market, exacerbated by consecutive poor harvests in Ivory Coast and Ghana, which collectively supply approximately two-thirds of the global cocoa production.
The concerns regarding long-term supply stability have prompted processing facilities and customers to engage in frenzied efforts to secure shipments as swiftly as possible. The urgency to address the looming supply shortfall has driven market participants to navigate through the challenges of sourcing cocoa beans amidst heightened competition and rising costs.
The current dynamics within the cocoa market highlight the urgent need for strategies to mitigate supply constraints and stabilize prices. As stakeholders across the supply chain contend with the repercussions of insufficient harvests and increasing demand, effective measures to address these challenges become imperative to ensure the sustainability and resilience of the cocoa industry in the face of ongoing pressures.
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