Chocolate lovers beware: Cocoa prices have doubled as extreme weather batters supply

• Cocoa prices have doubled during the past year, hitting an all-time high, Bloomberg reported.
• The most active cocoa contract hit $5,600 a metric ton, passing a record high of $5,379 in 1977.

Chocolate lovers beware: the price of cocoa has hit an all-time high, threatening to make chocolate more expensive.

Cocoa prices have doubled during the past year, with the most active futures contract hitting $5,600 a metric ton on Thursday, Bloomberg reported. That's the highest price the contract has reached in data compiled by Bloomberg spanning 65 years.

The last record high was notched in 1977, when contracts hit $5,379 a ton.

At the crux of the crunch is extreme weather events that have battered crops in West Africa, which provide most of the world's cocoa beans. After a torrent of rain helped spread a crop disease that buffeted supply, dry weather threatens to further stymie production.

Earlier this week the president of the European Cocoa Association, Paul Davis, said he wouldn't rule out prices soaring to $6,000 a ton.

"We've got headwinds all over the place at the moment," he said. "Very expensive fertilizers, tough conditions for farmers, tough conditions for consumers."

That's set to hurt the likes of chocolate makers like Hershey, which said in its earnings report on Thursday that "historic cocoa prices" are expected to crimp earnings growth in 2024.

And it's not a shortage that can be immediately reversed. While some growers have expanded their production amidst the shortage, new trees take a few years to grow cocoa beans.

"We are in a very tight balance," which is likely to last for another 18 months to three years, Davis said. "There is no cavalry that's coming to the rescue."

Crops around the world have suffered from increasingly extreme weather events. Last year, damaged harvests also boosted the price of sugar, orange juice, and olive oil to multi-year highs.