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The Global Cacao Crunch

There has been allot of change and movement in the Global Cacao markets this year as demand outstrips supply, causing sharp price rises.


In this weeks blog we cover some of the causes behind the disruption.


Global cacao prices are rising as farmers struggle with devastating weather patterns, pests, and disease. This has resulted in a rapid decline in cacao yields, leading to a phenomenal increase in cocao prices, soaring 300% this year.


While ceremonial cocao is native to South America, West African countries, especially Côte d'Ivoire and Ghana, produce around 60% of the world's cocao. This industry holds great cultural and historical significance in West Africa, with cacao being used in traditional ceremonies and serving as a significant source of income for many families. South American producers in Ecuador, Brazil, and Peru contribute 17% to the global output; however, the dominance of West Africa in cocoa production has created a high level of dependency on the crop, which has become crucial in the current crisis.


As the world faces an unprecedented cocao supply deficit, it is not just a concern for cacao enthusiasts but a global issue with far-reaching implications.


So what are some of the factors affecting this currently supply / demand issue?


Unprecedented weather

Increasing rainfall, a consequence of global warming, has been blamed partly for spreading disease among cocao plants, notably in Cote d'Ivoire, which experienced twice its normal rainfall levels in July 2023. The El Niño weather phenomenon (the warming of sea surface temperatures), known for its adverse effects on agriculture, has also led to drier conditions and, consequently, lower cocoa yields in previous years. The seasonal harmattan winds (the north-easterly trade winds that blow from the Sahara over West Africa into the Gulf of Guinea) were unusually severe this year and adversely affected crop yields.


Crop Disease

The Black Pod disease and Cacao Swollen Shoot Virus (CSSVD) are causing significant damage to cacao trees. the last 60 years, they have lost 80% and 94% of their forests, respectively. Black Pod disease is caused by excessive rainfall, high relative humidity, and low temperatures, creating perfect conditions for fungal-like organisms called oomycetes to grow on cacao pods rapidly. It's a challenge to locate and isolate infected cocoa trees, especially on large cocao farms, and if left untreated, it can destroy entire yields. CSSVD is one of the most economically damaging diseases of cacao trees, accounting for almost 15–50% of harvest losses. This virus is transmitted by several species of mealybugs when they feed on cacao plants. According to data compiled since 2018 and reported by Reuters, around 590,000 hectares of plantations have been infected by CSSVD. Once infected with CSSVD, plantations must be destroyed, and the soil treated before replanting can commence. 



The Fallout

As a result, The International Cocao Organization predicts an 11% decrease in global cocoa production this season. This decline in supply isn't just a statistic; it's a warning sign that could lead to a significant rise in cacao prices. As climatic conditions worsen further, the economic consequences of the cocoa supply deficit are likely to become more pronounced, highlighting the urgent need for immediate action. Long-term, significant regulatory pressures result from new laws protecting the environment, affecting long-term cocoa production by limiting options for new cocoa farms. The EU Regulation on Deforestation requires operators and traders to ensure products are not sourced from recently deforested land. The regulation also aims to ensure that products sold in Europe do not contribute to forest degradation.


At Creation Cacao we have done our best to prepare for such times including stockpiling cacao, to ensure an ongoing and reliable supply of high quality, affordable cacao to our customers, during these challenging conditions.


At this stage we continue to provide Ceremonial Cacao to our business and personal customers without further price rises.


We appreciate your support greatly and will keep you updated as the global situation unfolds.



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