Cocoa prices are soaring to over 10,000 dollars per ton and paving the way for a further increase in the price of chocolate.
Production difficulties in some West African countries such as Ghana and Ivory Coast have boosted prices, whose run-up has been exacerbated by hedge fund bets.
The result has been record prices: since the beginning of the year they have risen by over 140% while in the last 12 months they have tripled.
The jump in cocoa will likely prompt an increase in chocolate from giants such as Hershey and Mondelez, hitting consumer wallets already strained by inflation and fueling the risk of slowing Easter sales in the United States and elsewhere .
Due to the rise in cocoa prices, BNP Paribas Exane has reduced its rating on Hershey to 'neutral' from 'outperform'.
"A significant part of the cocoa inflation we are seeing could be structural" following European rules on deforestation, explained Max Gumport, analyst at BNP Paribas Exane, as reported by the Bloomberg agency.
Hershey forecast in February flat revenue this year after a 12% decline in net income in the fourth quarter.
Since then, however, tensions have worsened and prices have continued to rise, discounting production problems in West Africa.
The two largest producers, Ivory Coast and Ghana, have in fact been hit by a mix of heavy rains and drought, as well as paying the price of widespread diseases among the crops and difficult road conditions that have made the transportation of cocoa complicated in ports.
Ghana and Ivory Coast are the world's two largest cocoa producers "with two-thirds of global supplies. Any changes to their production tend to have a significant impact on the cocoa market," the International Cocoa Organization said.
To support sales, many American chains have increased Easter discounts on Cadbury, Reese's, Hershey's, M&M and Lindt products.
According to some observers, the discounts are partly justified given that chocolate companies have already passed on the increases to consumers, further reducing their appetite for purchases.
Estimates indicate an Easter with barely any growth for chocolate producers and, overall, a difficult 2023.
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