Climatic Adversities and Black Pod Disease
Unfavorable weather conditions, including the impact of El Niño, have led to a significant rise in cocoa prices, reaching a 45-year high.
Spread of the black pod disease has adversely affected cocoa crops, potentially leading to a third consecutive year of deficit for the 2023-24 season.
Supply Shortages and Impact on Demand
Reduced supplies from key producers like the Ivory Coast and Ghana have caused a sharp decline in global cocoa arrivals, leading to an 18% drop in demand in the international markets during the third quarter of 2023.
Impact on Chocolate Prices
Festive Season Implications
Soaring cocoa prices have resulted in a surge in chocolate prices during the festive season, affecting major festivals like Diwali, Halloween, and Christmas.
Limited raw material supply of cocoa and sugar due to adverse weather conditions in West Africa and India is anticipated to further elevate end-product prices, potentially impacting consumption.
Sugar Export Restrictions in India
Regulatory Measures
India’s decision to place sugar under a restricted category is aimed at controlling the unregulated export of sugar and ensuring adequate domestic availability at reasonable prices.
The extension of the export restrictions by the Director General of Foreign Trade (DGFT) further underscores the focus on stabilizing domestic sugar prices and addressing consumer price inflation concerns.
Conclusion
The current surge in cocoa prices, primarily driven by adverse weather conditions and supply shortages, has significantly impacted the chocolate industry, leading to heightened prices during the festive season. Additionally, India’s efforts to regulate sugar exports aim to maintain stability in the domestic market and alleviate consumer price inflation concerns.
