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    Cocoa Prices Reach Record Highs, Experts Predict Further Increases

    In recent months, the price of cocoa per ton on global exchanges has surged to unprecedented levels, surpassing $11,000 USD. However, according to a report titled “RETAIL PRICE INDEX,” experts suggest that this may not be the peak. Projections indicate that this year, prices could exceed $12-13,000 USD and even approach $15,000 USD. Additionally, a severe shortage of the commodity worldwide is expected to worsen this year, with African farmers reporting dismal harvests due to poor yields and other factors. Many have already abandoned unprofitable production ventures.

    The repercussions of this trend are already evident, with cocoa-containing products, including food items, cosmetics, and supplements, becoming increasingly expensive. In Polish stores, prices of sweets and desserts have risen by nearly 10% and over 30% for wafers between March and April this year. Further hikes are anticipated.

    Dr. Justyna Rybacka from WSB Merito University reports that cocoa prices on the London Stock Exchange have soared from just over £2,000 GBP in May 2023 to over £10,000 GBP in late April 2024, marking a fivefold increase within a year. Dr. Artur Fiks, also from WSB Merito University, notes that cocoa prices, which were slightly over $4,000 USD per ton in December last year, experienced a sharp uptick in January, reaching approximately $6,300 USD in February and exceeding $11,000 USD in April. Despite a brief dip below $10,000 USD in early April, prices quickly rebounded, with many market specialists anticipating further growth.

    Robert Biegaj, a consultant for the aforementioned report and a retail market expert from Offerista Group, asserts that nothing will halt the upward trajectory of cocoa prices on global exchanges. He predicts that prices may surpass $12-13,000 USD and potentially approach $15,000 USD this year, primarily due to the dire situation in major producing markets, particularly in Africa.

    Dr. Rybacka adds that adverse weather conditions in Ghana and the Ivory Coast, responsible for over 50% of global cocoa production, including heavy rains, drought, and strong winds, have hindered yields. While increased supply from other regions like Ecuador or Brazil, which collectively contribute around 10% to global production, could alleviate shortages, ramping up production is a lengthy process with initial effects not expected for several years.

    Cocoa is highly susceptible to weather fluctuations, and the United Nations Conference on Trade and Development predicts a shortage of 374,000 tons this year, compared to 74,000 tons last season. Dr. Fiks emphasizes that concerted efforts are needed to boost yields, necessitating investments in cocoa-producing countries and climate change mitigation globally.

    The majority of cocoa farmers live in extreme poverty, facing challenges that may force them to abandon cocoa cultivation. Even substantial price increases on markets may not suffice to provide adequate incomes for farmers. Biegaj suggests that sustained price hikes could incentivize farmers to maintain or resume production, balancing supply and demand and eventually alleviating cocoa shortages.

    According to the “RETAIL PRICE INDEX” report by UCE RESEARCH and WSB Merito Universities, sweets and desserts saw a significant price hike in March, with prices increasing by 9.6% year-on-year. For instance, chocolate-covered wafers surged by 30.7%, while chocolate bars rose by 16.8%. Preliminary estimates suggest further deteriorating conditions in April, with analysts anticipating even higher price increases in May.

    Dr. Artur Fiks speculates that cocoa-based products will continue to see steep price rises, potentially leading manufacturers to explore reducing cocoa usage in their products if demand wanes due to price hikes. Dr. Rybacka notes that the impacts of high cocoa prices are felt across various industries, including food processing, confectioneries, and restaurants, as well as in cosmetics and medicine.

    As cocoa trees fruit year-round, with the main harvest season from September to March, consumers should brace for further price hikes in the third and fourth quarters of 2024 if subsequent harvests fail to meet expectations. In conclusion, experts warn of prolonged challenges in the cocoa market, urging strategic actions to address supply shortages and mitigate the adverse impacts on farmers and consumers alike.

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