As chocolate makers hike prices, shrink packages.
Cocoa futures rose to a fresh intraday record, topping $7 000 in New York for the first time, as supply concerns drive a rally that shows no sign of offering relief for chocolate makers.
Citi Research analysts including Aakash Doshi said in February that New York cocoa futures could trade in a range between $7,000 and $10,000 a ton if West African supply continues to deteriorate without any meaningful contraction in demand. In that scenario, a retreat in prices may not come until the second half of 2025, the analysts said.
While hedging and physical stockpiles currently provide a buffer, chocolatiers’ costs — and then consumer prices — are “set to inflate” over the next six to 12 months, according to Bloomberg Intelligence analysts Diana Gomes and Ignacio Canals Polo. Volume losses could continue into 2025, the analysts wrote in a note last week.
Demand fears have been subdued in the face of poor growing weather, low production and slow arrivals, analysts at the Hightower Report wrote in a Tuesday note, adding that slight improvements in West African weather and the pace of arrivals haven’t been “enough to get the bulls concerned.” ADVERTISEMENT CONTINUE READING BELOW Structural issues in West Africa including disease and an aging tree stock are also stoking fears that deficits will continue next season.
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