United States - The world of cocoa production is facing a major crisis. Recent reports have revealed a significant decline in cocoa yields, primarily due to extreme weather patterns.
In West Africa, particularly in Ivory Coast and Ghana, excessive rain, flooding, and the spread of black pod fungal disease have severely impacted cocoa bean crops.
Antoine Legrand, a Master Commodity Analyst at Cargill, highlighted the impact of unusually wet weather in West Africa. This has fostered fungal diseases, which have been detrimental to the development of cocoa pods.
Moreover, the looming threat of an El Niño episode this winter is expected to affect cocoa crops in Latin America and Indonesia as well.
Dave Beaulieu of Global Organics provided further insights into the situation. In Ivory Coast, heavy rains have been disastrous for the tiny flowers that eventually turn into cocoa pods. Many have not survived, and those that have developed are battling brown rot, a fungal disease attacking cocoa pods.
The implications of these adverse conditions are evident in the soaring cocoa prices, which have reached a 46-year high. Ryan Jacobs from Bunge Loders Croklaan noted a staggering 37.6% increase in cocoa price from January to September 2023, with a year-over-year rise of 57.1%.
These skyrocketing prices, combined with high US sugar prices, signal no immediate relief in sight. An Ho from IFPC warns of the unstable future of cocoa supplies due to climate change challenges and potential price fluctuations. This instability threatens the affordability of chocolate products and the costs of production.
Amid these challenges, consumers are beginning to cut back on chocolate purchases, prompting manufacturers to seek alternatives to combat rising commodity costs and keep consumer prices stable.
However, there's concern that reduced freight costs, which have currently fallen by about 60%, might not continue, potentially exacerbating the situation further.
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