Cocoa prices double from start of 2024 as Easter approaches

Prices of cocoa on global markets have doubled in less than three months as their landmark surge intensifies, boosting costs for consumers and sending chocolate makers scouring for supply.

The most-active contract in New York rose as much as 5.9% to $8,493 a metric ton, the highest on record.

Crops in West Africa — the heavyweight growing region — have been battered by diseases and a series of weather extremes, putting the world on track for a third straight supply deficit.

Processing plants there are already suffering from shutdowns, and looming environmental regulations for European importers are adding to the hurdles to source beans.

“There is still no visibility on the next crop, and the challenge for Ivory Coast and Ghana is no one knows how they can address their production issues,” said Fuad Mohammed Abubakar, head of Ghana Cocoa Marketing Company UK.

“There is no supply rescue in the next few months,” he said.

The cocoa rally is accelerating just ahead of Easter, a major chocolate-consuming holiday in countries including Europe and the US.

While manufacturers buy beans months ahead of time, the rally is beginning to bite and some bars are getting more expensive, smaller or filled with other flavours to blunt the impact.

“There are lots of players who have already announced price increases. We are also part of that group,” Martin Hug, chief financial officer at chocolate maker Lindt & Spruengli, said on an earnings call earlier this month.

“It is very difficult to predict at the moment what will happen with the cocoa market. But I think we have controlled it as well as we can," he said.

In the past, cocoa prices have been supported because expanding acreage for cocoa trees is also limited, amid EU regulations that prevent the trade of products linked to deforestation.

In response to the higher global prices, some other countries like Ecuador and Brazil are ramping up production, but trees take at least three years to produce pods. Demand for chocolate products had also in the recent past held up despite price hikes.