09
Jun
VOLATILITY IN COCOA PRICES AND ITS IMPACT
In recent months, the global cocoa market has witnessed unprecedented price volatility, capturing the attention of industry and consumers alike. On April 2024, cocoa prices soared to a historic high of $11,206 per metric ton, a stark contrast to the $4,275 per metric ton seen just six months prior. This dramatic fluctuation reflects a complex interplay of factors influencing the cocoa industry and implications.
Understanding these price fluctuations is crucial. The change in cocoa prices conditions the entire supply chain: farmers in cocoa-producing regions, chocolate companies, and end consumers purchasing chocolate products.
Factors contributing to cocoa price volatility
El Niño phenomenon and crop diseases
The El Niño weather pattern has significantly disrupted cocoa production in major producing countries. Characterised by high temperatures and low humidity, El Niño conditions have severely impacted cocoa harvests in regions like Ivory Coast and Ghana, accounting for approximately 70% of the world’s cocoa supply. The International Cocoa Organization (ICCO) reported that arrivals at Ivorian and Ghanaian ports were down 28% and 35%, respectively, compared to the same period last season.
Adding to the challenges posed by El Niño, ICCO (2024) reports crop diseases such as the swollen shoot virus have devastated...