The price of cocoa has shot up, and it will soon be felt in retail as well

Sudden increases in cocoa prices are usually caused by some unexpected event, such as a major production or supply problem. In this case, the world’s largest cocoa-producing countries, especially West Africa, experience a serious drop in the amount of the crop, which can serve as the main reason for the drastic price increase.

One of the characteristics of the cocoa market is that traders and processors often use futures contracts to insure themselves against price changes. In this way, both parties would seek stability and would avoid huge risks. However, an unexpected imbalance or change in the system can easily confuse the market, leading to a drastic price increase.