Cocoa prices have surged, doubling in the past year, causing concerns for customers this Valentine's Day. The increase in prices is due to climate changes affecting cocoa production in West Africa, which is responsible for over 60% of global cocoa production. As a result, even major chocolate makers like Hershey Co. are struggling to remain profitable and have announced layoffs. The rising cocoa prices, along with the increased prices of sugar, labor, and other factors, will lead to higher prices for consumers. Retail chocolate prices have already increased by about 17% over the past two years and are expected to continue rising. Despite these challenges, roughly 92% of Americans still plan to share chocolate and candy for Valentine's Day this year. However, chocolate businesses are also facing other cost increases, including sugar prices, cocoa butter, packaging, and labor costs. The outlook for cocoa in 2024 is also concerning, as climate change conditions are negatively impacting cocoa farms in Ghana and Cote d'Ivoire. These climate shifts could result in significant losses in cocoa production, leading to further price increases. However, the higher cocoa prices on the international market do not necessarily benefit cocoa farmers, as the farm gate price set by the government may not reflect the futures prices. This squeeze on cocoa farmers is a growing concern.
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