We suppose that you have already seen some news about the historic rise in the price of cacao but we wanted to tell you from our own experience what we are experiencing.
Caco price in the last 5 years (dollar futures market)
Source: Nasdaq.com
Since the last few months we have been experiencing a sharp rise in prices, which is the largest increase in history in almost 50 years. Economists have dubbed it "the cacaocrisis". The reasons behind the behavior of cacao prices are related to climate change and crop diseases, low investment in farms, price speculation on the stock exchange, the demand for the product on the world market and conflicts and political instability.
As in other agricultural industries, climate change affects crops and, as a result, the final harvest. El Niño-related rains in West Africa have almost completely destroyed cacao crops. Already last year, these trees were stressed by extreme high and low temperatures, which are not common in these countries.
Another relevant factor has been the disease that has affected the cacao plant called black pod. It is caused by fungus-like parasites, causing the loss of cacao fruits and the complete loss of the tree.
These losses lead farmers not to reinvest in their crops or not to plant new trees. They choose to plant other less labor-intensive and more productive crops.
In addition, the major cacao producers (Ghana, Cameroon, Nigeria and, above all, Côte d'Ivoire (60% of world production)) are highly unstable politically.
In addition, the high demand for cacao has contributed to the increase in the price of cacao, butter and its final productBar chocolateBar ).
The London stock market (where the rise or fall in the cost of any product is analyzed) has seen cacao soar more than 230% in the last year and double its all-time high to reach 10,000 dollars (9,214 euros) per ton last week. Twelve months earlier it was trading at $2,900 (2,672 euros).
Normally we are not affected by increases or decreases in the price of coffee or cacao in the stock market, since we buy from small farms or cooperatives where quality is the most important thing and where we pay fairly for the product from the beginning, but this increase is so exceptional and historical that it is affecting us.
We hope that at some point this situation will stabilize and cacao will be appreciated more than ever and placed where it deserves to be.
We leave you with some articles on this subject so that you can continue to soak up information.
Cocoa Runners - The rising price of cocoa
Bloomberg - Africa's cacao bean crop falls short just when it is most needed
DW.com - Who benefits from record cacao prices?
If you have any questions and want to ask us more, we are always here.
Thank you very much for trusting us.
The Puchero Team