Cocoa prices surge to all-time highs as bad weather hurts West Africa crop yield

Cocoa prices surge to all-time highs as bad weather hurts West Africa crop yield

The hand of Alain Kablan Porquet in dry cocoa beans, in Gagnoa, Ivory Coast, November 19 2023. 

The Washington Post | Getty Images

Cocoa prices have surged to all-time highs this week as bad weather circumstances hammer crop yields in West Africa, house to three quarters of the world’s manufacturing.

Cocoa futures prices have surged greater than $1,000 or almost 40% because the begin of the yr to hit an intraday all-time excessive of $5,874 per metric ton Thursday.

The El Nino weather phenomenon is inflicting drier temperatures in West Africa, hurting crop yields in Ghana and Ivory Coast, the 2 largest producers of the bean.

“The altering weather patterns implies that the potential yields of cocoa at the moment are completely impaired,” Humza Hussain, a commodities analyst at TD Asset Management, advised CNBC Thursday.

Hershey CEO Michele Buck stated Thursday that the chocolate maker’s earnings development can be flat this yr due to traditionally excessive cocoa prices. Hershey reported fourth quarter internet earnings of $349 million, an almost 12% lower in contrast to the year-ago interval.

“As we have a look at these report cocoa prices, definitely it is a dynamic market and people are a problem however we’ve got lived by means of market volatility and fluctuation in enter prices earlier than,” Buck advised CNBC Thursday.

“We have a very good hedging technique and we’ve got actually good worth visibility on these inputs into 2024,” she stated.

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