Tierra Farms - Rising Cocoa Prices
From Tierra Farms:
Please be aware that over the past two years, the price of cocoa has been rising due to several factors:
- Supply shortage. The International Cocoa Organization predicts that the global cocoa supply will decrease by nearly 11% in the 2023/2024 season.
- Reduced bean production. Major cocoa producing nations in West and Central Africa have seen a significant drop in bean production.
- Underinvestment. Cocoa farms have been chronically underinvested in. South Africa has taken acreage out of production in lieu of diamond mining.
- On the Ivory Coast, Indonesia and Ghana have lost 30-40% of their crop due to pests, disease, and soil degradation.
- Inflation pressure
- Weather. Drought negatively impacting West Africa in particular.
- Labor shortages in the trade and logistics segment are expected to put upward pressure on global freight cost.