Cocoa’s growth knows no limits and has surprised even professionals in the sector, who speak of “the market has gone mad”. Prices have doubled since January, with a 60% increase in March alone. This week, on the London Stock Exchange, cocoa prices fluctuated by more than 600 pounds in a single day, whereas a year ago the daily fluctuations were between 15 and 20 pounds, and even 50 pounds. Even reached.
supply crisis
These prices, which have no limit, reflect the decline in harvest in West Africa, linked to particularly poor weather conditions, the aging of plantations and the high prevalence of diseases affecting cocoa trees. The main crop that has just finished may be down by a quarter or even a third, and the next crop, which is about to start, is looking no better.
Behind the increase in prices is the huge fear of manufacturers running out of raw materials. “Everyone is panicking,” the head of Guan Chong Cocoa (GCB), one of Asia’s biggest cocoa bean crushers, said a few days ago.
Another expert in the field confirms: “Cocoa butter traders and manufacturers look for beans everywhere, regardless of origin and quality, the only motto is to buy.”
supply drop
In fact, some mill owners do not hesitate to pay a premium to stock up, in hopes of not closing their factories. Apart from Côte d’Ivoire and Ghana, where prices are fixed for the entire season, most other origins have seen prices rise: beans can now be bought for 4,000 CFA francs per kilo in Madagascar, for example. For example, Cameroon already has 5,000 CFA francs.
The situation is so tense that most of the crushers have exhausted half their grain reserves, one of them admitted. Small transformers have only a few days of stock left.
Another consequence of this increase for consumers is that the price of eggs and other Easter figures has skyrocketed. The situation may get worse next year, as most price increases occur over a period of several months.
(TagstoTranslate)newspaper