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Consumers planning to buy chocolates for their loved ones this Valentine’s Day may be hit by sticker shock, and not just because of inflation.
Cocoa prices, which have been on the rise due to crop damage in West Africa, soared to record highs last week, with continued shortages weighing on chocolate makers, who are expected to pass on the price increases. There is. client.
Global cocoa prices hit a new high for the ninth day in a row on Friday, sparking panic that supply shortages could be prolonged. Abnormal weather And cocoa plants in West Africa, the highest producing region, have been hit by disease.
Chocolates wrapped in Chicago for Valentine’s Day, February 2, 2024. Cocoa prices are soaring, recently reaching record levels, and chocolate prices are also soaring. (Photo illustration: Scott Olson/Getty Images)
Benchmark ICE London cocoa futures fell 2.1% to close at 4,757 pounds per tonne on Friday, after hitting a record high of 4,916 pounds per tonne. Prices have more than doubled since the beginning of last year.
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In New York, the benchmark ICE cocoa futures price hit a new high of $6,030 per tonne on Friday, and closed 1.4% higher at $5,888 per tonne, almost doubling since the start of last year.
Short supply has pushed up cocoa prices, hitting record highs last week. (Trade Economics)
A Reuters cocoa poll earlier this month predicted a global cocoa shortfall of 375,000 tonnes for the 2023/24 season, more than double the amount shown in the previous survey in August, and the market This is the third consecutive year of cocoa shortage for Japan.
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Rising prices are spilling over to retail shelves, with Hershey expecting demand for its products from cash-conscious customers to further slow after sales fell 6.6% in the fourth quarter. are doing.
Hershey said last week that high cocoa prices will limit its earnings next year. (Luke Charette/via Bloomberg/Getty Images)
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| HSY | The Hershey Company | 194.39 | -1.00 | -0.51% |
The company, whose shares are down about 30% from its peak in May 2023, said last week that high cocoa prices will limit profit growth this year.
Rival Cadbury maker Mondelez’s sales volumes also fell last quarter.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| MDLZ | Mondelez International Co., Ltd. | 73.17 | -1.59 | -2.13% |
Mondelēz International Co., Ltd.
“If you go back 47 years, almost every big price crash was followed by a massive 20-50% drop within a year or two. Is this situation different? According to my sources in the cocoa groves…yes!” said Jim Romer, a meteorologist and commodity trading advisor at Best Weather.
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“At least for now, the tight situation is likely to continue for another month or two,” he added.
Reuters contributed to this report.
