Prices for cocoa beans reached a maximum in 10 years

Cocoa bean prices have skyrocketed to their highest in a decade. As of July 27, 2023, the cost of New York cocoa futures reached $3,500 per 1 ton. The last time such a high price was observed was in 2011. This is due to various problems in West Africa, a key region supplying cocoa beans to the world market . The local production of cocoa beans is suffering from heavy rains. Important suppliers of cocoa beans to the world market are the West African countries of Côte d’Ivoire and Ghana, both of which are already experiencing problems with growing products. Bloomberg estimates that the Ivory Coast bean harvest will fall by 20% compared to last year, and in Ghana it will fall below the historical average.

The shortage forced key chocolate makers Lindt & Sprungli AG and Hershey Co. issue a warning about possible further price increases. Moreover, the crisis in the industry can affect not only the quantity of products, but also their quality. In addition to raising prices, chocolate companies may reduce the size of chocolate bars, Bloomberg reports.

In the near future, prices are unlikely to decline, according to Bloomberg. According to the agency, high prices for the main raw materials for the production of chocolate will remain until 2024. Companies that process raw materials have also begun to experience problems. For example, the processing of cocoa beans in the UK has fallen sharply, indicating difficulties for companies to access the right amount of raw materials.

The rise in prices for cocoa beans will certainly affect Russia, too, says Ramaz Chanturia, general director of the Roschaikofe association. Nevertheless, it should be understood that the more processed products are produced in Russia, the less the country depends on price fluctuations. Outside Russia, cocoa prices are clearly linked to foreign currencies, most often to the dollar, so the cost of production is affected not only by rising prices for raw materials, but also by the exchange rate factor. According to the expert, the main problem affecting the rise in prices is the concentration of the main production capacities in two countries – Côte d’Ivoire and Ghana. As a result, all the problems of these countries, including those due to climate change, lead to higher prices, Chanturia concludes.