Cocoa prices rally to four-decade high on New York Stock Exchange
In a historic development not seen in over four decades in the cocoa industry, the price of cocoa beans for advance sales on the New York Stock Exchange soared to $3,786 per ton, equivalent to 2.34 million FCFA, on October 23, marking its highest level since 1979, according to sources.
However, during the following session on October 24, the price experienced a slight dip, declining by 0.55% to $3,738. It's worth noting that the price of this essential agricultural commodity, for which Côte d'Ivoire stands as the world's leading producer with a substantial 40% market share, has witnessed an extraordinary surge of over 60% in just one year.
This historic price peak can be attributed to production challenges stemming from adverse weather conditions and a growing global demand. As a consequence of this cocoa price surge, which comes as good news for major producers like Côte d'Ivoire and Ghana, the chocolate industry faces significant pressure on production costs, which could have various implications for consumers in the short or medium term.
Cocoa prices have experienced an upward trajectory in the past year, attributed in part to the heavy rainfall in West Africa, which facilitated the spread of black pod disease. This disease leads to the darkening and decay of cocoa pods, potentially resulting in reduced crop quality and production. This situation raises concerns that the global cocoa market may face a third consecutive year of deficit during the 2023/24 season. Furthermore, the expansion of the swollen shoot virus poses a significant threat to cocoa crops in Ivory Coast. This virus is transmitted through mealybugs that feed on cocoa plant sap, ultimately leading to a substantial reduction in crop yields and plant demise. Tropical Research Services estimates that approximately 20% of Ivory Coast's cocoa crop is affected by the swollen shoot virus. These developments have sparked worries about diminished cocoa production in Ghana, the world's second-largest cocoa producer, creating a bullish outlook for cocoa prices.