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I replied to this. The bad weather, etc, amounts to an 11% reduction in crop. Cocoa is very elastic, so an 11% reduction in crop should not lead to a 300% incr
by ars 3y ago
I replied to this. The bad weather, etc, amounts to an 11% reduction in crop.
Cocoa is very elastic, so an 11% reduction in crop should not lead to a 300% increase in prices. The normal thing instead would for people to eat less chocolate until there is enough supply, with only minimal change in prices.
Instead there's something weird going on - tell me, would you buy a chocolate snack that costs 3 times as much as last year? Or would you buy a different snack instead?
- fngjdflmdflg 3y agoTake a look at the already expired March cocoa futures.[0] This is clearly not speculation. >The normal thing instead would for people to eat less chocolate until there is enough supply The cost of cocoa is not identical to the cost of chocolate. >Based on a 200g milk chocolate bar costing €2, cocoa comprises around 10 percent of total costs; sugar 1 percent; milk products 6 percent; production, packaging and marketing and profits around 78 percent and tax 6 percent. [1] This means a 3x increase in prices would make the bar cost €2.60. There are also products that use only small amounts of chocolate, reducing the total increase even further. For example the increase in chocolate costs in a chocolate chip cookie is negligible. [0] https://www.barchart.com/futures/quotes/CCH24 https://www.barchart.com/futures/quotes/CCH24 [1] https://edepot.wur.nl/335476 https://edepot.wur.nl/335476