Home Business News Chocolate prices could soar further amid blight on cocoa trees, financial expert warns

Chocolate prices could soar further amid blight on cocoa trees, financial expert warns

by LLB Finance Reporter
29th Apr 24 8:32 am

Concerns over cocoa plant virus may see chocolate prices climb higher once again.

Consumers could see the price of their favourite chocolate treats shoot up amid issues with cocoa plants and production in West Africa, a financial expert has warned.

Ole Hansen, head of commodity strategy at investment platform Saxo, has said that while there has been an easing in the rapid increase of the price of cocoa seen at the start of the year, it’s predicted that it could soar again amid a slew of issues which may filter down to supermarket shelves.

As cocoa crops have been hit with a virus caused by mealybugs, harvest has been down and vaccines are a big expense for cocoa farmers, elements which have driven prices ‘significantly higher’ and will continue to do so into next year, according to 2025 predictions.

Ole Hansen, Head of Commodity Strategy at Saxo, said, “New York cocoa futures traded lower on the week after hitting a fresh record high near USD 12,000 per ton.

“While the rapid rise seen in the first quarter has slowed, concerns over a diminished harvest in West Africa, a major chocolate ingredient supplier, persist.

Adverse weather, aging trees, and crop diseases in Ghana and Ivory Coast have caused cocoa prices to more than double in the past year. Output is expected to fall short of consumption for a third consecutive season, indicating a potential long-term decline in the region’s cocoa production.

“Complicating matters, a widespread virus threatens cocoa tree health, particularly in Ghana, where the cocoa swollen shoot virus disease (CSSVD) carried by mealybugs has caused harvest losses ranging from 15 to 50%.

While tree vaccines can combat the virus, their cost is prohibitive for many low-wage farmers struggling to make ends meet following years of low cocoa prices and rising costs. Moreover, vaccinated trees yield smaller cocoa harvests, compounding the virus’s impact.

“These factors have driven prices significantly higher, not only during the current cycle but also next year as reflected by May 2025 futures trading near USD 8,000 per ton. Market volatility, not seen at this level since the 1970s, has dampened trading activity, exacerbating price swings.”

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