Business

Global Cocoa Prices Hit Fresh Record High As Dry Weather Damages Crops in West Africa

Cocoa prices on the New York commodities market have reached a new all-time high of $5,874 (£4,655) a ton on Thursday.

The cost of the key ingredient for making chocolate has now roughly doubled since the start of last year.

Soaring cocoa prices are already filtering through to consumers and squeezing major chocolate makers.

On Thursday, one of the world’s biggest chocolate manufacturers, Hershey warned: “Historic cocoa prices are expected to limit earnings growth this year.”

The company’s chief executive, Michele Buck also did not rule out putting up prices for customers.

“We can’t talk about future pricing, given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business.”

The comments came as Hershey announced its financial results for the three months to 31 December. The figures showed sales fell by 6.6% as inflation-hit consumers cut back spending on confectionery.

Last month, Mondelez, the company behind the Cadbury brand, identified rising costs of ingredients as one of the challenges it faced in the year ahead.

Chief financial officer Luca Zaramella said the firm had seen “significant increases in both cocoa and sugar”.

While overall inflation for UK supermarket food and drink eased in November to 8.3%, the rise in the chocolate prices was significantly higher at 15.3%.

Cocoa prices have been driven up by poor harvests in West Africa, which produces the bulk of global supply.

The El Niño weather phenomenon has been causing drier weather in Ghana and Ivory Coast, which are the world’s two biggest producers of cocoa beans.

Hotter temperatures and shifts in rainfall patterns caused by climate change can also have an impact on harvests.

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