This week has seen an unprecedented spike in cocoa prices as unfavourable weather severely damages crop output in West Africa, which produces three quarters of the world's supply.
Since the beginning of the year, cocoa futures prices have increased by more than $1,000, or over 40%, to reach an intraday all-time high of $5,874 per metric tonne on Thursday.
The two countries that produce the most beans, Ivory Coast and Ghana, are suffering from lower crop yields due to the El Nino weather phenomena, which is bringing drier temperatures to West Africa.
“The changing weather patterns means that the potential yields of cocoa are now permanently impaired,” Humza Hussain, a commodities analyst at TD Asset Management, told CNBC Thursday.
Due to unusually high cocoa prices, Hershey CEO Michele Buck stated on Thursday that the company's earnings growth will remain flat this year. With a net income of $349 million for the fourth quarter, Hershey recorded an almost 12% drop from the same period last year.
“As we look at those record cocoa prices, certainly it’s a dynamic market and those are a challenge but we have lived through market volatility and fluctuation in input costs before,” Buck said on Thursday.
“We have a good hedging strategy and we have really good price visibility on those inputs into 2024,” she said.
(Source:www.businessinsider.in)
Since the beginning of the year, cocoa futures prices have increased by more than $1,000, or over 40%, to reach an intraday all-time high of $5,874 per metric tonne on Thursday.
The two countries that produce the most beans, Ivory Coast and Ghana, are suffering from lower crop yields due to the El Nino weather phenomena, which is bringing drier temperatures to West Africa.
“The changing weather patterns means that the potential yields of cocoa are now permanently impaired,” Humza Hussain, a commodities analyst at TD Asset Management, told CNBC Thursday.
Due to unusually high cocoa prices, Hershey CEO Michele Buck stated on Thursday that the company's earnings growth will remain flat this year. With a net income of $349 million for the fourth quarter, Hershey recorded an almost 12% drop from the same period last year.
“As we look at those record cocoa prices, certainly it’s a dynamic market and those are a challenge but we have lived through market volatility and fluctuation in input costs before,” Buck said on Thursday.
“We have a good hedging strategy and we have really good price visibility on those inputs into 2024,” she said.
(Source:www.businessinsider.in)