Cocoa prices near 50-year highs – Analysis

Global Chocolate Shortage and High Demand Lead to Soaring Prices

Recent trading data has indicated that cocoa prices have reached their highest level in nearly 50 years, driven by a global decline in supply. New York futures for cocoa, a key ingredient in chocolate production, have surpassed $4,200 per metric ton, the highest price since September 1977. This price surge exceeds the peak reached in 2011 when Cote d’Ivoire implemented an export ban on cocoa. Since the beginning of this year, prices have increased by approximately 75%.

The price hike can be attributed to poor harvests in Cote d’Ivoire and Ghana, which together supply two-thirds of the world’s cocoa beans. Extreme weather conditions and crop diseases caused by reduced fertilizer use by farmers have significantly impacted cocoa production. The start of the harvest in both countries has already fallen behind last season’s pace, leading to concerns of further tightening in the already undersupplied market.

In the period from October 1 to November 12, Cote d’Ivoire farmers shipped 348,560 metric tons of cocoa, which was 25.3% lower than shipments during the same period last year, according to Trading Economics data.

Industry analysts predict that prices could continue to rise due to the potential threat of the El Niño weather phenomenon, which is expected to cause dry conditions in West Africa in the coming months. The shortage of supply is further exacerbated by an increase in global demand for cocoa beans, with processing levels rising in Europe, Brazil, and Cote d’Ivoire in recent months.

The International Cocoa Organization (ICCO) has estimated a deficit of 116,000 metric tons of cocoa for the current growing season (October 2022 to September 2023).

Analysis:

The article provides an overview of the global shortage and high demand for chocolate, resulting in soaring cocoa prices. However, the analysis of the article’s reliability raises a few concerns. Firstly, the article lacks specific details regarding the sources of information. While it mentions “trading data,” it does not provide any specific sources or references, making it difficult to independently verify the claims made. The mention of “media outlets” reporting on the start of the harvest falling behind last season’s pace also lacks specific references.

Additionally, the article states that prices have skyrocketed by roughly 75% so far this year, but it does not provide any evidence or data to support this claim. Similarly, the mention of poor crops in Cote d’Ivoire and Ghana can be seen as an assertion rather than being backed by concrete evidence or expert opinions.

Furthermore, the article briefly mentions the potential impact of the El Niño weather phenomenon but does not provide any expert insights or scientific data to substantiate this claim. The absence of expert opinions and specific references undermines the credibility of the information presented.

Considering the political landscape and the prevalence of fake news, it is crucial to approach such articles with caution. In the case of this article, the lack of specific sources and references makes it difficult to assess the reliability of the information and the potential biases that may exist. This could contribute to misinformation or a limited understanding of the factors driving the global shortage and high prices of chocolate.

In conclusion, while the article presents information on the global chocolate shortage and rising cocoa prices, its reliability is limited due to the lack of specific sources, references, and evidence to support the claims made. This highlights the importance of critically evaluating the credibility of sources and seeking additional information from reputable sources to develop a comprehensive understanding of the topic.

Source: RT news: Cocoa prices near 50-year highs