Cocoa, the New Bitcoin?

Globally, the world produces 6.5 million tonnes of Cocoa. The production of cocoa is extremely concentrated as almost 60% world’s cocoa beans are collectively produced by two of the West African countries: Ghana and Ivory Coast (Côte d'Ivoire), which are experiencing their lowest outputs in 13 and 7 years respectively.

At the beginning of this year, Cocoa was priced at $3000 a ton, which has risen to $10,000 a ton as of now. This hike in the prices is due to diminishing supplies amidst climate crises in West Africa.

Recently, the region experienced heavy rains due to El Nino which resulted in diseased crops. Additionally, many cocoa plants have already passed the point of maximum yield. This resulted in an urgent need for replanting rounds since matured trees can only produce limited quantities. Based on the prediction by The International Cocoa Organization (ICCO), the global cocoa supply is expected to decline by around 11% this year.

Cocoa, being the main component of Chocolate, will affect chocolate’s production and prices. Be it small producers or the Chocolate giants like Hershey’s, Nestle, and Mondelez, all are anticipated to be affected by the concerning shortage around the world.