Cocoa prices have soared 44% over the last nine months to seven-year highs as the global cocoa bean deficit worsens for the second consecutive year.
“The cocoa market has experienced a remarkable surge in prices … This season marks the second consecutive deficit, with cocoa ending stocks expected to dwindle to unusually low levels,” S&P Global Commodity Insights’ Principal Research Analyst Sergey Chetvertakov told CNBC via email.
Cocoa prices in New York surged more than 3% to $3,253 per metric ton — the highest since May 2016. The commodity last traded at $3,182 in the late US cash session on Tuesday.
Chetvertakov said the El Nino weather phenomenon might worsen the global supply shortage because less rain is expected across West Africa, where cocoa is primarily grown. About 60% of the world’s cocoa production is based in Côte d’Ivoire and Ghana. He warned prices could reach as high as $3,600 later this year.
He warned, “Consumers should brace themselves for the likelihood of higher chocolate prices,” adding chocolate producers are raising prices due to all-around higher costs.