The candy and chocolate giant Hershey Co., according to Bloomberg, has requested approval from the Commodities Futures Trading Commission (CFTC) to purchase over 90,000 metric tons of cocoa.
The Pennsylvania-based global confectionery company, in a bid to secure its cocoa supply ahead of a speculated scarcity in 2025, intends to acquire the product through the New York exchange.
Bloomberg reported that the deal is nine times the amount permitted by the exchange for acquisition.
This move is linked to Hershey’s shares, which dropped by 12 percent year-to-date in 2024, likely due to ongoing cocoa supply challenges and bearish market momentum since April 2023.
Ghana and Ivory Coast, the world’s second-largest cocoa producer, experienced strong winds and low rainfall in 2024, leading to pre-harvest losses and driving cocoa prices up by 60 percent.
Hershey Co.’s intention to purchase over 90,000 metric tons of cocoa aims to stockpile supplies, safeguarding against potential shortages that could re-emerge in 2025.
The disruptions in 2024, caused by adverse weather conditions in Ghana and harvest challenges in Ivory Coast during the fourth quarter, triggered significant supply shortages, further heightening demand.
The process would involve acquiring an amount of cocoa equivalent to all the certified or certifiable beans currently stored in New York exchange.
