Chocolate prices go Nuts: Raw ingredient Prices Set Record Of $12,000 A Ton
A year ago, the price of a ton of cacao, the raw ingredient in chocolate, was $6,700. Yesterday, that price reached $12,000.
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Some of the increase is low supply, largely caused by extreme weather. Another reason is speculation: traders are driving up the market, largely on the gamble that it will go higher for months. Either way, the consumer and the companies that rely on chocolate sales are paying the price.
According to The Wall Street Journal, most forecasts show that the weather in West Africa will damage crops in an area that produces about two-thirds of the cacao comes from that area. Commerzbank Research’s commodity analyst Carsten Fritsch wrote that “Cacao farmers in Ivory Coast are expecting smaller harvest volumes in February and March.”
Farmers fret
The world’s consumers consume about 8.1 million tons of chocolate a year. If the price doubles, that figure is likely to fall. Nestle, Mars, Hershey and Ferrero are most likely to be affected at the top and bottom lines. Additionally, the cacao farmers could be ruined financially.
Chocolate is a sticky mess.
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