Historic Rise in Cacao Prices – How will this impact us?

You’ve probably already seen news about the historical rise of cacao prices. Moreover, we would like to inform you from our point of view and our own experience.

Stock market quotation of cacao in the last 5 years:

Source: Nasdaq.com

In recent months we have been experiencing a sharp rise in prices, which is the largest rise in history in almost 50 years. Economists have dubbed it “the cacao crisis.” The main reasons for these prices are climate change and crop diseases, low investment in farms, speculation in stock market prices, demand for the product in the world market, and conflicts and political instability.

As in other agricultural industries, climate change affects crops and, as a result, the final harvest. Rains related to “The child” phenomenon in West Africa have almost destroyed cacao crops. Last year, these trees were stressed by extreme rises and falls in temperature, which are not common in these countries.

Another relevant factor has been the disease that has affected the cacao plant called the black pod. It is caused by fungal-like parasites, causing the loss of cocoa fruits and the complete loss of the tree.

These losses lead farmers not to reinvest in their crops or plant new trees. They choose plantations of other less laborious and more productive crops.

We must add the great political instability of the large cocoa producers (Ghana, Cameroon, Nigeria and, above all, Ivory Coast (60% of world production)).

Furthermore, the great demand for cacao has contributed to the price rise of cacao, butter and its final product (chocolate bar).

In the London stock market (where the increase or decrease in the cost of any product is analyzed) it has been seen that cacao has skyrocketed more than 230% in the last year and doubled its historical maximum until reaching 10,000 dollars (9,214 euros) per ton last week. Twelve months earlier it was trading at $2,900 (2,672 euros).

Increases or decreases in the prices of coffee or cacao in the stock market do not usually affect us. This is because we buy from small farms or cooperatives where quality is the most important thing and where we pay fairly for the product. However, this rise is so exceptional and historic that it affects us.

We hope this situation will stabilize and cacao will be appreciated more than ever and placed where it deserves.

We leave you some entries on this topic so that you can continue soaking up the information.

If you have any questions or want to inquire about anything else, we are always here.

Thank you very much for trusting us.

From Puchero’s team