By Katie Davis C hocolate addicts could be paying more to get their sweet fix soon as cocoa prices are increasing because of the demand for cocoa and the depleting supply of the world’s top cocoa growing region of the Ivory Coast. News of this caused July futures to jump as much as 6.8 percent, which is a record increase. This has farmers in West Africa looking to take advantage of the increase and locking in more forward sales for next year’s crop than traders were expecting, a sign that supplies from the current harvest are begin- ning to get depleted. This is a major change from a market that has been dealing with the effects of a global surplus that has caused prices to drop as much as 32 percent over the past 12 months.
This was great news for chocolate lovers and retailers as it lowered cost for the tasty treat.
However, it looks like that trend is about to change and analysts predict pricing increase along with lower supply will drive up prices in the near future for those with a sweet tooth as the market rebounds after hitting the lowest level in 10 years this past April. Farmers in the Ivory Coast have sold more than 950,000 tons of cocoa beans from the 2017-18 main crop as of May 27th. The main crop, which starts Oct. 1, is the larger of the country’s two annual harvests. Jack Scoville, vice president for Price Futures Group in Chicago said in a recent interview, “that’s a pretty big upfront sale, and it’s probably the reason why prices are rallying.” To add to this problem some growing regions in Ivory Coast and Ghana, the second-largest producer, have been extremely dry this season and need some much needed rain to help with crop production as a low yield or any additional setbacks in plants or harvest to push prices even higher.
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SPOTLIGHT ON BUSINESS MAGAZINE • MAY 2017
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