(Finance) – It’s an alarm for the increase in the price of cocoa, which is influencing the entire confectionery supply chain, affecting the cost of chocolate, which has already recorded an increase of 14% this year (based on data provided by NielsenIQ) and is expected to increase by another 7% in the next five months. This is what emerges from the “Cocoa Insights 2024” report published by RedMarketing.
The report shows that cocoa prices, in real terms, have exceeded the levels of the 2021/22 season. Average cocoa prices in September 2023 were already significantly high, with an average of $3,739 per ton in London And $3,669 per ton in New York (a year earlier the average price was $2,083 in London and $2,339 in New York). The price, however, did not stop there and reached new highs, now reaching approx $4,201 in New York, a 55% increase from the beginning of 2023 and 66% year-on-year.
The following contributed to influencing the market climate changes, which have shocked the sector, due to the rise in global temperatures, particularly in the last year with the meteorological phenomenon El Niño. In many cocoa-producing countries there have been variations in the rainy seasons, with periods of prolonged drought followed by torrential rains.
The cocoa industry is a major source of income for many West African countries, particularly the Ivory Coast and the Ghanawhich together represent over 60% of global cocoa production.
The trend of global temperatures constantly increasing has made the environment more unfavorable for cocoa cultivationwith a direct impact on the production of these exporting countries at a quantitative and qualitative level (lower quality, parasites, diseases of cocoa plants).
It is expected that the cocoa price for 2024 will depend on several factors, including economic conditions global conditions meteorological and the request of the market.
From the ICCO report it emerges that the Cocoa processing activities have decreased in the main consuming regions of cocoa (Europe, Southeast Asia and North America) in the first quarter of the 2022/23 cocoa season, likely due to high operating costs in a context of strong global inflation and persistently high energy costs. Some of Africa’s largest cocoa producers, such as Ivory Coastplan to further expand their operations cocoa processing at domestic level. These factors could influence global cocoa supply and demand and, consequently, prices.
In summary, while the global economic context suggests a potential inflationary pressure and potentially reduced demand for cocoa in developed markets, the increase in cocoa processing in producing countries could be influence the balance between supply and demandwith possible repercussions on cocoa prices in 2024.
According to an article on Nasdaq, cocoa prices are expected can exceed the maximum levels of 2011, reaching levels exceeding $4,000 per ton in the coming months.
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