Cocoa prices hit their highest point in 44 years this week as uncooperative weather conditions in the region where the cacao plant is grown has caused a shortage of the crop.
About 75% of the world’s cacao beans come from West African countries like the Ivory Coast, Ghana, Cameroon, and Nigeria, and right now that region of the world is experiencing a hotter, drier season than to which it is accustomed.
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One of the big culprits for the change in weather is the El Niño weather system, which author Madeline Nash once called a “master weather-maker.” The mercurial weather phenomenon — which was named by South American fishermen who first noticed periods of unusually warm water in the Pacific Ocean in the 1600s — occurs every two to seven years.
Long story short, warm Pacific Ocean water from the Eastern Pacific Ocean causes the Pacific jet stream to move south of its neutral position. This shift affects the weather north of the jet stream and causes all types of whacky weather to occur across the globe.
That whacky weather is hurting cacao plant growth in West Africa where Ivory Coast accounts for 30% of the world’s cocoa production, Ghana accounts for 12%, and Nigeria and Cameroon combine for about 10% of production.
Meanwhile, the U.S. imported $942 million worth of cacao beans (15% of the world’s total) in 2022.
It’s Halloween candy season in the U.S., which makes chocolate a must-have on American shopping lists, but the price of candy in September was 7.% higher than it was a year ago.
Americans are expected to spend $3.6 billion on candy this Halloween, up from $3.1 billion last year, according to a survey by the National Retail Federation.
But Mars — the company behind popular trick-or-treating staples like Snickers, M&M’s and Milky Way — says that it hasn’t raised prices since June.
“Like many industries, we continue to face high inflation and spikes in material costs; however, we work to absorb these extra costs wherever possible to provide affordable treats and the best value. We have not implemented any price increases since June and those were in line with category,” the company told CNBC.
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