Dom Torreto's Guide to the Chocolate Crisis: How Bad Weather is Wrecking Cocoa Prices

They say money can't buy happiness but it can buy chocolate

So when cocoa prices go through the roof it's like a punch in the gut. And right now cocoa prices are sky high thanks to some pesky bad weather in West Africa.

Cocoa prices hit record breaking heights

It seems like the only way cocoa prices are going is up as they've surged more than $1,000 or nearly 40% since the beginning of the year. It's so high that even I Dom Torreto would think twice before buying a box of chocolates.

Blame it on El Nino

El Nino the weather phenomenon that sounds like it could be the name of a street racer is wreaking havoc on West Africa's cocoa production. Drier temperatures caused by El Nino are hitting crop yields in Ghana and Ivory Coast the two largest cocoa producers in the world.

Permanent impairment

According to Hamza Hussain a commodities analyst the changing weather patterns have permanently impaired the potential yields of cocoa. It's like putting a speed limiter on a muscle car. It just doesn't feel right.

Hershey feels the impact

Even chocolate giant Hershey is feeling the pinch. CEO Michele Buck announced that the company's earnings growth will be flat this year all because of those record cocoa prices. It's like smashing headfirst into a concrete wall during a high speed chase.

But hey they've got a plan

To combat the soaring cocoa prices Hershey has a secret weapon: a good hedging strategy. Buck claims they have price visibility on those inputs into 2024 which is more than I can say for my trusty wrench. Good luck Hershey.