Stellar Snippets
Hotter and drier weather has negatively affected the cacao bean crop growth with cocoa futures rising to $3,786/metric ton - the highest since 1970.
The cacao bean is roasted to make cocoa and has been growing in warmer climates with less rainfall, especially in the largest cacao-producing area in West Africa.
According to Wells Fargo's Agri-Food Institute analyst David Branch, Ghana, Nigeria, Cameroon, and the Ivory Coast produce 75% of the world's cocoa beans.
Maintaining a good cacao crop has been difficult because of the lack of consistent weather with good rainfall, humidity, wind protection, and nitrogen-rich soil.
Part of the reason the already-vulnerable cacao crop is being threatened is because of the weather phenomenon El Nino which could last until mid-2024.
There was a cocoa deficit even last season. Along with rising sugar prices, this has added to chocolate makers' concerns about raising prices.
Candy brand Mars stated that it has worked to absorb the costs of inflation wherever possible to make their chocolate as affordable as possible.
While Mars hasn't increased their candy prices since June, specialty chocolate makers remain unaffected as they already pay double the market price.
However, the ripple effect of the cocoa shortage may be seen in reduced candy sizes even if the prices don't change, which is still worrisome.