- Steve Wateridge, managing partner at Tropical Research Services, said a global cocoa bean surplus could cause already low New York cocoa bean futures to fall another 25%, according to Food Business News.
- Wateridge predicted that futures could fall to $1,500 a ton in the next few months, a 50% drop from highs above $3,000 a ton posted early in 2016, if the surplus equals or surpasses that of 2016.
- The size of next year’s cocoa crop in West Africa, the commodity’s top producer, may be revealed as early as the second quarter of 2017.
The International Cocoa Organization said last September that cocoa production fell 3.9% to 4.2 million tons, and cocoa prices rose steadily as a result. The decline in cocoa production also led chocolate producers and companies to invest $1 billion to boost the crop's sustainability.
The surplus, however, erases some of that worry.
Candy companies like Hershey and Mars saw earnings affected by the prices last year. A surplus could help all candy companies, as prices will be more competitive across the board. The amount of cocoa beans in a chocolate bar varies, but is significant. And with Easter on the horizon, there has not been a better time year to buy chocolate bunnies.
In terms of the commodity market, the surplus could harm investments. There had been a bull market for cocoa beans for several years, but now it is softening considerably. Additionally, consumers are looking for snacks with less sugar, whittling down the demand for chocolate. However, manufacturers can take advantage of the lower prices and start adding real chocolate back to their products.