Tags: cocoa | prices | chocolate | valentines day

Cocoa Prices Top Record Before Valentine's Day

Cocoa Prices Top Record Before Valentine's Day
(Dreamstime)

Wednesday, 07 February 2024 05:10 PM EST

Prices for cocoa on ICE exchange in New York, the United States' benchmark for the chocolate-making ingredient, rose to the highest ever Wednesday, surpassing the previous peak set in 1977, amid a global scarcity of the agricultural commodity.

The all-time price peak for cocoa in the U.S. happens just a few days before Valentine's Day celebration on Feb. 12, one of the hottest chocolate buying periods in the country, when many people exchange sweets, flowers or cards with loved ones.

New York cocoa prices rose 3.6% on Wednesday to $5,410 a metric ton. London cocoa futures also hit a record high, gaining 2.4% on the day to 4,344 pounds per ton.

New York cocoa had gained 61% in 2023 and is up 29% so far this year as a result of falling output in Africa due to unfavorable weather.

Higher raw material costs eventually reach final products. According to NIQ, a company that tracks consumer buying behavior, chocolate prices at groceries in the U.S. rose 11% at the end of January, compared with a year earlier, and unit sales fell 5%.

"For Valentine's Day shoppers specifically, these (price) spikes may be sending them in a different direction for expressing their affection, such as opting for homemade gifts, or experiences instead of tangible goods," said Carman Allison, VP of Global Thought Leadership at NIQ.

LSEG soft commodities researcher Daniel Pereira said the relationship between raw cocoa prices and retail prices of a milk chocolate bar, for example, is not linear.

"Brands can choose to temporarily live with lower profits to keep their market position," he said, adding that existing stocks bought in the past when prices for cocoa were lower can also delay retail price hikes for chocolate.

Wednesday's surge in cocoa prices happened after news from Ghana, the world's second largest grower, of a 35% annual drop in the amount of cocoa arrivals at export warehouses in the country.

Brokers said reports from Ghana, as well as from No. 1 producer Ivory Coast, of lower arrivals are leading the market to a much larger supply deficit (the difference between production and demand) than previously expected.

In other soft commodities, raw sugar gained 1.4% at 23.88 cents per lb, while refined sugar rose 0.7% at $656.50 a ton.

Arabica coffee settled up 1.5% at $1.8785 per lb, while robusta coffee gained 0.6% at $3,115 a ton.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
Prices for cocoa on ICE exchange in New York, the United States' benchmark for the chocolate-making ingredient, rose to the highest ever Wednesday, surpassing the previous peak set in 1977, amid a global scarcity of the agricultural commodity.
cocoa, prices, chocolate, valentines day
395
2024-10-07
Wednesday, 07 February 2024 05:10 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved