Cocoa stocks hit record low, shortage threatens chocolate producers

Cocoa stocks in London and New York have fallen to their lowest levels in recent years, exacerbating problems for chocolate producers. Due to poor harvests for several years, the market has been experiencing a serious shortage, forcing companies to look for alternative ingredients or change recipes.

This is reported by The Financial Times.

On the London Intercontinental Exchange, stocks of usable cocoa have fallen from more than 100,000 tons to about 21,000 tons over the year. In New York, the situation is also critical – total reserves are about 90 thousand tons, which is a record low for this time of year.

It is noted that chocolate prices have increased by 20% compared to last year.

The main cocoa-producing countries – Côte d’Ivoire and Ghana – continue to suffer from adverse weather conditions and the spread of diseases, which further aggravates the situation. Over the past three years, harvests have remained scarce, and cocoa prices in London have reached their highest level in 50 years.

Chocolate companies are already feeling the effects of the crisis. For example, Hershey last month asked the US derivatives regulator to purchase up to 90 thousand tons of cocoa through the New York Stock Exchange, which is nine times the limit.

According to the report, this shortage is forcing manufacturers to change the composition of chocolate. Instead of using traditional cocoa butter and grated cocoa, some companies are switching to cocoa powder with the addition of vegetable fats. Japan’s Fuji Oil reported an increase in sales of such substitutes, while sales of traditional chocolate, on the contrary, are falling.

Despite a slight decline in cocoa prices since the December peak, analysts warn that the market is still unstable. Some experts warn that if stocks in exchange warehouses are exhausted, the only way to get cocoa is to buy it at much higher prices.

For consumers, this means a further increase in chocolate prices and a change in its recipe, where the cocoa content will be reduced in favor of cheaper substitutes.

As a reminder, in December 2024, the price of cocoa reached its highest level in seven months due to deteriorating harvest prospects in West Africa, the main producing region. The price of cocoa in New York rose by 4.6% to $10,305 per ton, and in London – by 4.4%.

Tags: prices, cocoa