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LONDON/ACCRA — Major African cocoa plants in Ivory Coast and Ghana have stopped or cut processing because they cannot afford to buy beans, four trading sources said, meaning chocolate prices around the world are likely to soar.
Chocolate-makers have already increased prices to consumers, after three years of poor cocoa harvests, with a fourth expected, in the two countries that produce nearly 60% of the world’s cocoa.
Cocoa prices have more than doubled over the last year, scaling numerous all-time highs.
The report explains the shortage of cocoa beans is having a domino effect. Farmers normally sell their cocoa beans to local dealers, who then sell them to processing plants or global traders.
Those traders then sell beans or cocoa products – butter, powder and cocoa liquor – to global chocolate giants such as Nestle, Hershey and Mondelez.
Unable to produce chocolate using raw cocoa, chocolate makers depend on processors to turn the cocoa beans into butter and liquor, which can then be made into chocolate.
However, the processors say the price of the cocoa beans has shot up so high that they cannot afford to buy them.
About half of the world’s cocoa is produced in the Ivory Coast, where some of the country’s nine major cocoa plants are expected to shut down soon, the report warns.
One state-run Ivorian bean processor, Transcao, said it has already stopped buying beans because of the price. They are still processing from what they already had in stock, but two sources said the plant is almost idle.
Most of the eight plants in Ghana have also suspended operations multiple times since October.
The disruption in the entire process is already affecting chocolate prices in the United States, where retail stores are charging nearly 12% more than in 2022, the report explains.
Exclusive: Major African cocoa plants in Ivory Coast and Ghana have stopped or cut processing because they cannot afford to buy beans, four trading sources said, meaning chocolate prices around the world are likely to soar https://t.co/jPmbrunrnh
— Reuters (@Reuters) March 14, 2024
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