Reuters – Major African cocoa plants in Ivory Coast and Ghana have stopped or cut processing because they cannot afford to buy beans, four trading sources said, meaning chocolate prices around the world are likely to soar.
Chocolate-makers have already increased prices to consumers, after three years of poor cocoa harvests, with a fourth expected, in the two countries that produce nearly 60% of the world’s cocoa.
Cocoa prices have more than doubled over the last year, scaling numerous all-time highs.
“We need massive demand destruction to catch up with the supply destruction,” Tropical Research Services’ Steve Wateridge, a world expert on cocoa, said.
Chocolate-makers cannot produce chocolate using raw cocoa and rely on processors to turn beans into butter and liquor that can be made into chocolate.
But the processors say they cannot afford to buy the beans.
State-controlled Ivorian bean processor Transcao, one of the country’s nine major plants, said it had stopped buying beans because of their price.
It said it was still processing from stock, but did not say what capacity it was running at. Two industry sources said the plant was almost idle.
They asked not to be named because they were not authorised to speak publicly on the issue.
One of the two sources said more major state run plants could shut soon in top grower Ivory Coast, which produces nearly half the world’s cocoa.
The same two sources said even global trader Cargill struggled to source beans for its major processing plant in Ivory Coast, halting operations for about a week last month. Cargill did not respond to a request for comment.
In No. 2 cocoa grower Ghana, most of its eight plants, including state-owned Cocoa Processing Company (CPC), have repeatedly suspended work for weeks since the season started in October, two separate industry sources said.
CPC said it is operating at about 20% of capacity because of the shortage of beans.
