Cocoa futures surge nearly 4.8% to all-time high

March cocoa futures rose as much as $539, or 4.8%, to an all-time high of $11,839 a metric ton on Monday.

In the latest instance, traders are adjusting to renewed concerns over cocoa bean supplies that have been “exacerbated by long-standing industry problems, including crop disease and a legacy of low farmer wages.”

According to CNBC, higher raw material prices inevitably lead to higher costs for chocolate makers and higher prices for consumers.

So far in December, Hershey shares have risen nearly 4% while Mondelez shares have fallen 4.5% through Friday.

Cocoa prices in both markets surged earlier this year as crops in Ghana and Ivory Coast, where two-thirds of the world’s cocoa beans are grown, were destroyed by bad weather and pests, along with an influx of hedge funds into the market.

But the global shortage has sparked a race among cocoa bean producers to secure high-quality beans, while avoiding older varieties. Stockpiles of harvested beans are emptying, with U.S. stockpiles falling to a 15-year low and London warehouses at their lowest since 2021.