Hershey Seeks Permission To Buy Huge Amount Of Cocoa

(MENAFN- Yolo Wire) %Chocolate maker %HersheyCo (NYSE: $HSY) is seeking special permission from regulators to buy a huge amount of %Cocoa as global shortages of the commodity worsen.

Hershey, which makes Reese Peanut Butter Cups and Hershey Kisses, is asking the top U.S. derivatives regulator for permission to buy large amounts of cocoa through the New York stock exchange (NYSE).

Specifically, Hershey is seeking permission from the U.S. Commodity Futures Trading Commission (CFTC) to buy more than 90,000 metric tons of cocoa on the ICE Futures exchange.

The request by Hershey is more than nine times the amount the exchange currently allows.

The move by the Pennsylvania-based chocolate maker comes as the global market for cocoa, the active ingredient in chocolate, is forecast to face a fourth year of supply shortages.

Cocoa prices hit multiple record highs in 2024 after disease and poor weather wiped out cocoa crops in Ivory Coast and Ghana, which account for more than 60% of global supplies.

Cocoa is now in such scarce supply that Hershey, one of the world’s largest chocolate makers, is petitioning for a rare exemption from the CFTC.

The amount of cocoa the company wants to purchase is so large it exceeds a U.S. federal limit of 49,000 tons.

Hershey’s move comes as cocoa stockpiles in warehouses around the world decline, having dropped more than 70% since May 2023.

The amount of cocoa Hershey wants to buy is equivalent to roughly all of the beans currently in warehouses that are certified or could be certified for delivery.

This isn’t the first time Hershey has upended the New York futures market.

In 2020, at the height of the Covid-19 pandemic, the company took such a big position in cocoa that it sent prices to their then highest level on record.

The stock of Hershey has declined 16% in the last 12 months to trade at $162.22 U.S. per share.

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