In a devastating blow to the cocoa industry, trading houses are staring at a staggering loss of at least $1 billion due to Ghana’s failure to deliver cocoa beans this year.
The crisis has been precipitated by a combination of factors, including “bad weather, bean disease, smuggling, and illegal gold mining,” which have severely impacted Ghana’s cocoa production.
As a result, the West African country is struggling to deliver up to 350,000 metric tons of cocoa beans, which is nearly half of its committed quantity.
This shortage has sent shockwaves through the industry, with traders facing losses of approximately $4,000 per ton on cocoa futures, totaling a whopping $1.4 billion.
To mitigate their losses, traders will likely pass on the costs to chocolate makers, who are already grappling with high prices and dwindling consumer demand.
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However, chocolate companies may find it challenging to absorb these increased costs without passing them on to consumers, who are already buying less chocolate due to its high price.
The cocoa industry is bracing itself for a period of uncertainty and volatility, as Ghana’s delivery debacle continues to unfold.
The crisis serves as a stark reminder of the vulnerabilities inherent in the global cocoa supply chain and the need for sustainable and resilient practices to ensure the long-term viability of this critical industry.
