Declining cocoa harvests and long term outlook

“The Theobroma cacao tree originated in the upper Amazon basin region (Brazil, Colombia, and Peru). Today, cacao is grown by 40-50 million cocoa farmers in more than 50 countries around the world. 90% of the world’s cocoa is grown on small family farms, while only 5% is grown on larger commercial plantations. For the majority of these farmers, cacao is their primary source of income. Many make less than $1USD a day for their hard work growing and harvesting cacao — so supporting sustainable farming practices and fair trade chocolate is more important than ever!”

“IN ITS PRIME. A young cacao tree grows rapidly, but it won’t begin to produce beans until it’s about five years old. A cacao tree can live up to 100 years, but most trees only provide marketable cacao beans for about 25 years”

"Cacao trees grow in a limited geographical zone, of about 20° to the north and south of the Equator. Nearly 70% of the world crop today is grown in West Africa.

Despite its popularity with the world cocoa lacks the profit margins for growers to actually invest in their plants health so the current weather fluctuations and disease are limiting supply. Will they recover? Probably. if not the current growers then new ones will emerge but all of this leads to uncertainty. I am looking at hershey earnings 5-3-2024 for its guidance not performance. Even if they meet or exceed expectations and the stock goes up there will be note of the current issues that could lead to a drop post earnings.imageimageimageimageimageimageimageimage

I found this article interesting since it was made last year and it’s exceeded his projections

Other articles I read

Cocoa Keeps Hitting Record Highs, But Retail Investors Don't Have an Easy Way In.

This one too.![image](

Update on staircase undersideimage


So $SBUX goes up?


<:thonking:912804222825816085> were the people long on cocoa short tesla and nvidia or something

My interpretation of this confirms they are hedged until the end of this year and if the cocoa futures contracts continue to be manipulated they will start being effected sometime 2025. side note Hershey earnings transcript states they are expecting more sales in the Reeses brand with caramel flavor and expect the upcoming Olympics special edition medals to do well.image

They also sell other products so its not like they are having trouble but it’s still a good chunk of their business and determines their guidance