Fewer trick-or-treats a blow to cocoa growers

Fewer Americans will trick-or-treat this Halloween as Covid-19 infection numbers climb. While kids may be disappointed, the worst effects will be felt in Africa, where the world’s top cocoa producers may struggle to keep paying farmers a premium. Cocoa is used to make chocolates.

Ivory Coast and Ghana raised the price they pay cocoa growers by more than 20% for the larger of two annual crops. But with the pandemic keeping people at home, hurting Halloween sales that account for 10% of

Hershey’s business, the West African nations may struggle to lure chocolate makers to buy beans at a high enough level to keep paying farmers the promised premium.

The two countries, which account for about 70% of supply, have started charging a premium of $400 a metric ton for their beans. But while the main crop is already sold, they still need to sell their smaller harvest, according to a Bloomberg survey.

Data this week showed cocoa processing in Europe fell 4.7% in the third quarter, to the lowest for that period in four years. In North America, bean grinding declined 4% to the smallest for the period since at least 2008, while Asian processing dropped 10%.

Cocoa futures have held up well this year despite the pandemic as uncertainty about elections in West Africa has supported prices. Still, the price of cocoa butter, which accounts for 20% of the weight of a chocolate bar, has plunged more than 10% since early April, amid global lockdowns, according to data from KnowledgeCharts.—