Honolulu Star-Advertiser

Monday, July 15, 2024 84° Today's Paper


Top News

Cocoa climbs back above $10,000, chocolate industry outlook worsens

FILE PHOTO
                                Boamah Sonkaa, a cocoa farmer, visits his cocoa farm near the village of Kusa, in the Ashanti region of Ghana, in August 2022.
1/1
Swipe or click to see more

FILE PHOTO

Boamah Sonkaa, a cocoa farmer, visits his cocoa farm near the village of Kusa, in the Ashanti region of Ghana, in August 2022.

LONDON >> World cocoa prices rose back above $10,000 a ton today, heading towards the year’s record peaks as the chocolate industry’s supply crisis worsened after top producer Ivory Coast halted bean exports for June and forward sales for next season.

The news came a day after reports that Ghana, the world’s second-largest producer of the chocolate ingredient, is looking to delay delivery of up to 350,000 metric tons of beans to next season due to poor crops.

Cocoa has more than doubled in price this year, and is now costlier than many metals. September New York cocoa futures hit a six week peak earlier of $10,308 a ton, and settled up 2.6% at $10,110 a ton.

“Its a massive problem, Ivory Coast and Ghana are 30% below last year in terms of crop size. No-one knows how to make up for the missing cocoa, there isn’t enough near-term beans to supply the market,” said a dealer.

Sources told Reuters earlier Ivory Coast has suspended the purchase and export of cocoa for June in a bid to retain sufficient stock for local processors who have run out of beans to keep their factories running.

They added the ban might be extended beyond June, and that it covers multinationals such as Cargill, Barry Callebaut, CEMOI and Olam, meaning European factories waiting for Ivorian beans will have to turn to other sources.

The world’s largest cocoa producer has meanwhile also halted forward sales of next season’s crop at 940,000 metric tons, some 35% less than a year ago, as it awaits more clarity on expected production.

The current season’s production shortfall meant Ivory Coast oversold the 2023/24 October to March main crop, forcing it to roll contracts for 150,000 tons of beans into the current mid-crop.

Ghana is also struggling with forward sales as it looks to roll forward 350,000 tons of beans amid an uncertain crop outlook, with sources telling Reuters it has sold forward just 100,000 tons for 2024/25.

The country regularly sells one year forward about 80% of its crop – which usually totals 750,000-850,000 tons, but its current crop is not expected to exceed 500,000 tons and traders fear it might not rebound significantly next season.

September London cocoa ​​hit a six week high of 8,299 pounds per ton, and settled up 3.8% at 8,222 a ton.

In other soft commodities traded, July raw sugar was up 2.8% at 1650 GMT at 19.64 cents per lb, while August white sugar was up 2.3% at $567.80 a ton.

September robusta coffee settled up 0.2% at $4,093 a ton, while September arabica coffee settled up 0.6% at $2.2625 per lb.

By participating in online discussions you acknowledge that you have agreed to the Terms of Service. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. If your comments are inappropriate, you may be banned from posting. Report comments if you believe they do not follow our guidelines. Having trouble with comments? Learn more here.