Chocolate Shortage Looms: Rising Cocoa Prices Impact Halloween Treats
Everyone knows that Halloween wouldn’t be complete without candy, but trick-or-treaters may find themselves with fewer chocolates filling their buckets this year.
That’s because cocoa prices have more than doubled since the start of the year and remained at record highs, according to Wells Fargo data shared with CNN. The rising prices have caused confectioners to suffer during major chocolate sales seasons like Valentine’s Day and Easter.
And with Halloween set to be the next big candy-centric holiday, companies are getting creative with how they deal with the cocoa shortage. That means consumers may see smaller chocolate bars in different flavors and more chocolate-free treats on grocery store shelves and aisles.
Cocoa Booms
“Cocoa is not like a normal agricultural crop where you can grow it everywhere like other commodities. It requires a very specific location and temperature range to grow,” said David Branch, sector manager for Wells Fargo’s Agri-Food Institute.
But over the past three years, several adverse weather events have hit cocoa-growing regions in West Africa, which accounts for more than 70 percent of the world’s cocoa supply.
The El Niño phenomenon has raised temperatures and caused water stress in cocoa trees. Heavy rains have spread “brown pod,” a fungal disease that affects cocoa trees and reduces yields. Dry, dusty winds have blocked the crop from sunlight and affected growth.
As a result, the International Cocoa Organization projected in August that global cocoa production this season would fall by 14.2%.
Chocolate giant Hershey was among the companies forced to deal with sky-high prices. In August, it reported an operating profit of $287.8 million, down 48.7% from a year earlier.
The company’s CEO, Michele Buck, said on a call with analysts in August that cocoa prices were “not sustainable” and pointed to higher prices. (Hershey told CNN in a statement that the price changes would not impact its Halloween items this year.).
Click here to reach our trading platfrom CMBroker
That’s because cocoa prices have more than doubled since the start of the year and remained at record highs, according to Wells Fargo data shared with CNN. The rising prices have caused confectioners to suffer during major chocolate sales seasons like Valentine’s Day and Easter.
And with Halloween set to be the next big candy-centric holiday, companies are getting creative with how they deal with the cocoa shortage. That means consumers may see smaller chocolate bars in different flavors and more chocolate-free treats on grocery store shelves and aisles.
Cocoa Booms
“Cocoa is not like a normal agricultural crop where you can grow it everywhere like other commodities. It requires a very specific location and temperature range to grow,” said David Branch, sector manager for Wells Fargo’s Agri-Food Institute.
But over the past three years, several adverse weather events have hit cocoa-growing regions in West Africa, which accounts for more than 70 percent of the world’s cocoa supply.
The El Niño phenomenon has raised temperatures and caused water stress in cocoa trees. Heavy rains have spread “brown pod,” a fungal disease that affects cocoa trees and reduces yields. Dry, dusty winds have blocked the crop from sunlight and affected growth.
As a result, the International Cocoa Organization projected in August that global cocoa production this season would fall by 14.2%.
Chocolate giant Hershey was among the companies forced to deal with sky-high prices. In August, it reported an operating profit of $287.8 million, down 48.7% from a year earlier.
The company’s CEO, Michele Buck, said on a call with analysts in August that cocoa prices were “not sustainable” and pointed to higher prices. (Hershey told CNN in a statement that the price changes would not impact its Halloween items this year.).
Click here to reach our trading platfrom CMBroker