Transportation disruption is affecting cocoa supply from Ebola-hit West Africa and prices are being pushed up by fears the outbreak will spread across the region.
Cocoa beans are up 18.5% year on year to £1,891/tonne [Mintec 1 October 2014], while cocoa butter - a key ingredient in chocolate production - is up 6.9% to £4,858. Ebola has not been recorded in key cocoa-producing countries, but traders are worried it could reach major growing areas such as Ghana and Ivory Coast, which shares a border with Liberia where more than 2,000 have died.
Good weather in key regions has strengthened global cocoa production this year, with 2013/14 production forecast to be up 10% year on year to 4.3 million tonnes, 6% higher than initially forecast.
“Prices have been pushed up in recent weeks, despite better-than-expected supply, due to good demand and concerns the outbreak may spread,” said Yuliya Nam-Wright, Mintec analyst for traded commodities. “With the main harvest in progress, concerns have risen that the spread of Ebola will disrupt bean shipments as West African region has already seen some transportation disruption.”
The outbreak was also having an impact on travel between the UK and West Africa, said Charlotte Borger, communications director at Divine Chocolate, which sources all its cocoa from Ghana’s biggest farmers’ co-op, Kuapa Kokoo. “This may hamper our ability to travel there, and Kuapa’s representatives to travel here.”
Cadbury owner Mondelez said it was monitoring the situation closely, and that its top priority was the safety of its workers. “At the moment, we’re not aware of any immediate threats,” said the company.
Cocoa is the most important commodity exported from West Africa, said Nam-Wright, and there had been little global impact on other commodities.