Prices for chocolate-making ingredient cocoa jumped to the highest level in more than 12 years last week, amid growing concerns about future production at a time when available stocks are already low.
New York cocoa futures rose to $3,552 per metric ton, peaking earlier at $3,569 per ton, which is the highest price for the commodity since March 2011.
Experts have attributed the spike in prices to declining global supply of the product.
“I don’t think we ever had three consecutive years of deficit,” soft commodities analyst Judith Ganes told Reuters, adding that crops in the western part of Africa, where most cocoa is grown, are at risk of declining production.
Lower fertilizer use by farmers due to high costs and extreme weather threaten the amount of cocoa that top growers Ivory Coast and Ghana can produce, analysts warn. They also cite the prospect of a strong dry season from November onwards, as the El Nino weather event usually reduces rains in West Africa.
According to Bloomberg estimates, Ivory Coast’s cocoa bean harvest will fall by 20% in 2023 compared to last year. In Ghana, it is projected to fall below the historical average. The shortage forced key chocolate makers Lindt and Hershey Co. to issue a warning about potential further price increases.
The crisis in the industry could affect not only the quantity of products, but also quality. In addition to higher prices, chocolate companies may reduce the size of their chocolate bars, Bloomberg said.
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