“Everyone Is Panicking”: Major Cocoa Processor Scrambles To Find Beans As Prices Hyperinflate

March 22, 2024   |   Tags:
"Everyone Is Panicking": Major Cocoa Processor Scrambles To Find Beans As Prices Hyperinflate

One of the world's largest cocoa processors is scouring the globe for beans as weather and disease spark massive crop failures across West Africa and catapult prices in New York to record highs. 

"Everybody is panicking," said Brandon Tay Hoe Lian, chief executive officer of Guan Chong Bhd. He said the company is attempting to procure beans from minor growing countries, including Ecuador, Peru, and Indonesia. 

The CEO of the Kuala Lumpur-listed company said prices are soaring weekly as coca beans become harder and harder to find: "We not only have to fight for beans, we're also paying premiums."

Guan Chong's processing plant is still operating normally despite the world heading for a third year of supply deficits primarily due to crop failures across West Africa.

Tay warned: 

"We are quite skeptical about selling a lot because we're worried whether the beans will be delivered.

"I rather sell the minimum, just in case, as long as my cashflows are healthy. I don't want to commit to something that I cannot deliver."

As of Thursday morning, the most active cocoa contract in New York hit a new record high of $8,600 per ton. He warned the rally is far from over: "There's a lot more room to go higher."

Citi Research analysts recently advised clients that prices could reach as high as $10,000 a ton and stay in record-high territory through the second half of 2025. 

Meanwhile, US chocolate maker Hershey Company warned last month: "Historic cocoa prices are expected to limit earnings growth this year."

Bad news for those of us with a sweet tooth... 

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