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Cocoa prices increased by 40%: Financial expert explains why chocolate is becoming more expensive & what that means for manufacturers.
According to a report from www.nzz.ch, cocoa prices have risen by 40 percent since the beginning of the year. The increasing price of cocoa is having an enormous impact on chocolate manufacturers in Switzerland. This increase is mainly caused by poor weather conditions and diseases in the main producing countries, Ivory Coast and Ghana. A ton of cocoa currently costs around 5,150 francs. This price increase could also have an impact on the market and the financial industry in the long term. Over the past 20 years, cocoa has historically experienced significant price fluctuations, influenced by severe weather conditions and other factors. The recent increase in cocoa prices is mainly due to the El Niño weather phenomenon...
Cocoa prices increased by 40%: Financial expert explains why chocolate is becoming more expensive & what that means for manufacturers.
According to a report from www.nzz.ch, cocoa prices have risen by 40 percent since the beginning of the year. The increasing price of cocoa is having an enormous impact on chocolate manufacturers in Switzerland. This increase is mainly caused by poor weather conditions and diseases in the main producing countries, Ivory Coast and Ghana. A ton of cocoa currently costs around 5,150 francs. This price increase could also have an impact on the market and the financial industry in the long term.
Over the past 20 years, cocoa has historically experienced significant price fluctuations, influenced by severe weather conditions and other factors. The recent increase in cocoa prices is mainly due to the El Niño weather phenomenon, which has caused drought and heat in West Africa. Additionally, fungal diseases and viral outbreaks have affected the cocoa harvest. Another factor is the increased freight charges due to the attacks in the Red Sea.
Chocolate manufacturers are under pressure as they have to pass on rising raw material prices to consumers. Despite higher prices, some chocolate manufacturers such as Lindt & Sprüngli were able to increase their sales. They were able to offset higher costs through efficiency improvements and price increases to trading partners and consumers. Hershey also expects a loss in profits due to increased cocoa prices.
Cocoa farmers are benefiting from the increased prices, as the government in Ghana has increased the state-guaranteed cocoa price for farmers by more than 63 percent. This strengthens the farmers' income and prevents smuggling into neighboring countries.
These events demonstrate that cocoa prices can have important market and financial impacts by increasing costs for producers and strengthening the income and stability of cocoa farmers.
Read the source article at www.nzz.ch