The latest outlook from satellite company Maxar Technologies warns that dry conditions in West Africa will hurt the early development of the mid-year cocoa crop harvested in April and that the arrival of the seasonal Harmattan winds could worsen the situation.
Recent heavy rain in the region has led to reports of high mortality rates of cocoa buds on trees, pushing the prices sharply higher. Heavy rain in Cote d’Ivoire has also flooded fields, increased disease risk, and affected crop quality.
According to barchart.com, recently harvested cocoa beans from Cote d’Ivoire signal lower quality, with counts of about 105 beans per 100 grams. Le Conseil Café-Cacao (CCC), the country’s cocoa regulator, allows exporters to buy bean counts of 80 to 100 or slightly more for every 100 grams, with the best quality cocoa having the lower count.
Shrinking global cocoa stockpiles are also bullish for prices. ICE-monitored cocoa inventories held in US ports have been trending lower for the past 1 1/2 years and fell to a 20-year low of 1,464,328 bags on Tuesday.
Hershey's reportedly rejects Mondelēz offer
The Hershey Trust Company, owners of the Hershey brand, has rejected Mondelēz International's preliminary takeover offer, claiming it was “too low”, Bloomberg News reported on Wednesday.
If the deal were to go through it would create, one of the world's largest confectionery companies, but the Hershey Trust Company's approval is key in any takeover deal, given its voting control of the chocolate maker.
The Hershey Trust, established over a century ago by the company's founder, is a charitable organisation whose sole beneficiary is the Milton Hershey School.
Reuters reports that Hershey shares, which surged as much as 19% on Monday following the report on Mondelēz’s bid, were down 3.3% on Wednesday. Shares of Mondelez were up 3.5%.
ICYMI - In other news on cocoaradar.com this week:
Anthony Myers
Anthony Myers
Anthony Myers