Agricultural and related cost impacts in the cocoa market continue to affect chocolate sales, with global prices rising 17% year-on-year (y-o-y) because of strained output from leading producers, Ivory Coast and Ghana.
Locally, the ongoing spike was already evident in February when a bar of chocolate rose 4.3% month-on-month (m-o-m) to a new high of R22.48 for an 80g slab.
The m-o-m increase in the trade price of cocoa continued into March when a tonne fetched $9 733 on the open market, a new record that rose even further when it went to $10 051 at the beginning of April.
Weather-related pressure has punished producers in the Ivory Coast, where combined seasonal output barely yielded 1.3 million tonnes, a 28% year-on-year decrease.
When the harvesting season ends in September, Ivory Coast’s output is expected to be 1.75 million tonnes, the lowest it has been in eight years.
In Ghana, output is expected to be lower – about 422 500 tonnes.
At the end of March, news agency Reuters reported that falling cocoa production had had a significant impact on Ghana's trade surplus, which plummeted by 54% to $392.8 million in the first two months of the year, primarily attributed to a substantial drop in cocoa crop yields and export revenue.
Exchange rate devaluation of the CFA franc and Ghanaian cedi against the US dollar further escalated cocoa prices, failing to counterbalance a slump in supply of 11% to 4.45 million tonnes.
In the meantime, illegal trade on the black market is adding additional strain on traders, while predictions of more rainfall and a bigger crop next season are offering slight relief.
