Major African cocoa plants in Ivory Coast and Ghana have stopped or cut processing because they cannot afford to buy beans, four trading sources said, meaning chocolate prices around the world are likely to soar.
Chocolate-makers have already increased prices to consumers, after three years of poor cocoa harvests, with a fourth expected, in the two countries that produce nearly 60 per cent of the world's cocoa.
Cocoa prices have more than doubled over the last year, scaling numerous all-time highs.
"We need massive demand destruction to catch up with the supply destruction," Tropical Research Services' Steve Wateridge, a world expert on cocoa, said.
Chocolate-makers cannot produce chocolate using raw cocoa and rely on processors to turn beans into butter and liquor that can be made into chocolate.
But the processors say they cannot afford to buy the beans.
State-controlled Ivorian bean processor Transcao, one of the country's nine major plants, said it had stopped buying beans because of their price.
It said it was still processing from stock, but did not say what capacity it was running at. Two industry sources said the plant was almost idle.
They asked not to be named because they were not authorised to speak publicly on the issue.
One of the two sources said more major state-run plants could shut soon in top grower Ivory Coast, which produces nearly half the world's cocoa.
The same two sources said even global trader Cargill struggled to source beans for its major processing plant in Ivory Coast, halting operations for about a week last month. Cargill did not respond to a request for comment.
In No. 2 cocoa grower Ghana, most of its eight plants, including state-owned Cocoa Processing Company (CPC), have repeatedly suspended work for weeks since the season started in October, two separate industry sources said.
CPC said it is operating at about 20 per cent of capacity because of the shortage of beans.
Disruption at the farm gate
The price rally has derailed a long-established mechanism for global cocoa trade, through which farmers sell beans to local dealers who sell them on to processing plants or global traders.
Those traders then sell beans or cocoa products - butter, powder and cocoa liquor - to global chocolate giants such as Nestle, Hershey and Mondelez.
In normal times, the market is heavily regulated - traders and processors purchase beans from local dealers up to a year in advance at pre-agreed prices. Local regulators then set lower farmgate prices that farmers can charge for beans.
However, in times of shortage like this year, the system breaks down - local dealers often pay farmers a premium to the farmgate price to secure beans.
The dealers then sell the beans on the spot market at higher prices instead of delivering them at pre-agreed prices.
As global traders rush to purchase those beans at any price to meet their obligations with the chocolate firms, local processors are often left short of beans.
Ivorian and Ghanian authorities normally try to protect local plants by issuing them with cheap loans or by limiting volumes of beans that global traders can purchase.
This year, however, plants are not getting the cocoa they pre-ordered and cannot afford to buy at higher spot prices.
Already, chocolate-makers have raised prices. US retail stores charged 11.6 per cent more for chocolate products last year compared with 2022, data from market research firm Circana shows.
The International Cocoa Organisation (ICCO) expects global cocoa production will fall by 10.9 per cent to 4.45 million metric tons this season.
Grindings - a measure of demand - will fall by 4.8 per cent to 4.78 million as processors struggle to buy beans, and supply less butter at a higher price to chocolate-makers, which in turn raise prices.
The supply-demand mismatch will leave the market with a deficit of 374,000 tons this season, up from 74,000 tons last season, according to the ICCO.
This means processors and chocolate firms will have to draw on cocoa stocks to fully cover their needs. The ICCO expects global cocoa stocks to fall to their lowest in 45 years by the season end.
Wateridge of Tropical Research said the cocoa market could post another deficit next season based on the severity of bean disease in West Africa.
The market has not seen four successive years of deficit since the late 1960s, ICCO data shows.
Two business owners have been slapped with fines after being found selling vapes to children at shops in Liverpool. Sanctions have been handed down to two men who appeared before Liverpool and Knowsley Magistrates Court on Thursday.
Zahur Chaudhary, of Challoner Grove, was hit with a £250 fine after he was found to have sold a watermelon flavoured Elf Bar vape pen to a person under 18 at AF Newsagents on July 11. Chaudhary was also hit with costs of £250 and a £120 victim surcharge by magistrates.
The case was brought as the local authority continues its crackdown on illegal sales of vapes and illicit smoking products. The court also imposed a financial penalty on Farman Jolla for his role in prohibited sales.
Jolla, 36, of Beaumont Street, sold a cherry cola Elf Bar pen to an under-18 on the same date – July 11 – at Smithdown Sweets on Smithdown Road. The defendant was given a lesser fine of £150 with a victim surcharge of £60.
Similar costs of £250 were also applied. Court officials and the city council have taken a dim view towards illegal sales throughout the year.
A number of shops and licencees have been sanctioned during 2024, including one business where a teenage girl was able to access vapes and vodka leading to her requiring hospital treatment. When two teenagers entered Old Swan Express on Prescot Road last month, they were able to purchase two bottles of vodka without being challenged.
Owner Sinnathamby Arumugasamy lost his licence, despite only gaining permission to trade at the former angling store in February of this year. Claire Jones, from the council’s trading standards team, said she had conducted an undercover visit to the site and managed to purchase illegal cigarettes produced from beneath the counter for £5.
Ms Jones said it was “impossible” to sell them so cheaply if they had been legitimate. A Woolton convenience store shut down by the courts has had its licence revoked after engaging in “criminality.” Village News on Allerton Road was slapped with a three month closure order by Sefton Magistrates Court owing to “serious nuisance to members of the public.”
A total of 145 products were seized in October 2022 which had been stored in the shop, while in March this year, another 183 illicit vapes were also taken away. In June, the shop was informed it would be the subject of an underage sale test which was also failed when a 15-year-old boy was able to buy a £6 device.
The government on Friday announced that they will introduce new Respect Orders as part of the Crime and Policing Bill.
The measure, a modernised version of the anti-social behaviour orders that were introduced by the last Labour Government, is aimed at the most serious offenders who plague town centres and neighbourhoods with anti-social behaviour.
The Respect Orders will give the police and local councils powers to ban persistent offenders from town centres or from drinking in public spots such as high streets and local parks. These will be piloted prior to national rollout to make sure they are as effective as possible.
Perpetrators can also be required to address the root cause of their behaviour by being mandated to undertake positive rehabilitation, such as attending drug or alcohol treatment services, or an anger management course to address the underlying causes of their behaviour.
Failure to comply with Respect Orders will be a criminal offence. Police will have the ability to immediately arrest anybody who is breaching their Respect Order.
“Antisocial behaviour chips away at communities’ sense of confidence and pride, undermines local businesses and can have a devastating impact on victims,” Yvette Cooper, home secretary, said.
“This cannot be allowed to continue. Respect Orders will give police and councils the powers they need to crack down on repeated anti-social behaviour, keeping our communities safe and ensuring repeat offenders face the consequences of their actions.”
As well as prison sentences of up to two years, criminal courts will also be able to issue unlimited fines and community orders, such as unpaid work, and curfews as punishment for breaching a Respect Order.
Retail trade union Usdaw has welcomed the announcement, terming it as key step to tackling the epidemic of retail crime.
“After years of the Conservatives effectively decriminalising retail crime, leading to a more than doubling in shoplifting since the pandemic, we now have a government that is delivering on its promise to bring town centre crime under control,” Paddy Lillis, Usdaw general secretary, said.
“We very much welcome the announcement of new Respect Orders to tackle repeat offenders who terrorise shops and high streets, striking fear into the hearts of retail workers whenever they enter the store.”
Ecco+, another pre-Horizon IT system that was introduced to post masters between 1992 and 1999, was also likely to be faulty due to which hundreds of sub postmasters were prosecuted by the Post Office, a leading sub postmaster representative has said.
Speaking to Asian Trader today (22), Calum Greenhow – Chief Executive Officer at National Federation of Sub Postmasters (NFSP) stated that Ecco+ system that was introduced between 1992 and 1999 also created problems for sub post masters.
Greenhow said, "Apart from Capture that came in pre-Horizon time, there was another one called Ecco+ that was in operation between 1992 to 1999. Within that period, (I have learned just in the last few days) post office brought about 334 prosecutions over an eight-year period."
He added, "We have heard so much about Post Office carrying out prosecutions during the Horizon. The fact is, they carried out prosecutions prior to Horizon as well, to near enough the same number and to the same degree. So we're talking about a prosecution regime over a 32-year period, not a 25-year period. Their attitude against sub postmasters and their own staff has been prevalent for well over 30 years," he said.
The NFSP last month wrote to the minister in charge of the Post Office requesting a review of problems experienced by users of Ecco+. With Ecco+, there were fewer prosecutions based on the systems reporting shortfalls, but instead, some users “were either dismissed or forced to resign, leading to severe financial consequences”.
A Department for Business and Trade spokesperson said, “The possible issues relating to Ecco+ have been brought to our attention following the independent investigation into Capture. The Department is looking into the issue.”
Last month, on being asked by Computer Weekly for details on the Ecco+ systems, Post Office said, “We don’t have the information you’ve asked for about Ecco+ to hand, and so if you would like to pursue this, we would recommend you submit a freedom of information request given that the subject matter dates back some 30 years and that is the most appropriate route to conduct searches.”
Ecco+ is the second pre-Horizon system that has come under scanner. Earlier this year, an independent forensic analysis, commissioned by the government in May, reported that IT system Capture had bugs and glitches and there was a reasonable likelihood it had caused cash shortfalls too.
According to latest reports, at least eight convictions predating the Horizon Post Office scandal are being looked at by Criminal Cases Review Commission (CCRC) investigating potential miscarriages of justice after being affected by Capture software.
Lord Beamish, the former Labour MP Kevan Jones, has been supporting victims and is calling for the government to extend current legislation to automatically quash convictions.
"The government are going to have to take this seriously," he said. "We can't have a situation where we have a two-tier system where people get exonerated from Horizon and the Capture cases are either forgotten or have to go through a very lengthy legal process to get their names cleared."
Lord Zameer Choudrey CBE SI Pk, Chief Executive of Bestway Group, and Dawood Pervez, Managing Director of Bestway Wholesale, presented a cheque for £100,000 to The Duke of Edinburgh’s Award (DofE) at Bestway Group’s Head Office in Park Royal, London last week.
This significant contribution reflects Bestway's ongoing commitment to supporting impactful charitable initiatives that make a difference to the lives of young people across the UK. The presentation was attended by Ruth Marvel OBE, Chief Executive Officer, Laura Puddefoot-Knaggs, Head of Philanthropy and Clare Harris, Senior Relationships Manager from The Duke of Edinburgh’s Award, and Bestway Board of Directors, including Sir Anwar Pervez OBE H Pk, Chairman Bestway Group.
The £100,000 being donated to The Duke of Edinburgh’s Award was raised through Bestway’s annual Ascot Charity Race Day held in June this year (2024), which was attended by over 750 of Bestway’s key business contacts, supplier partners, colleagues, press and the charity. Each year the company hosts a charity race day at Ascot to raise funds for charity, an event that celebrated 31 years this year.
The Charity Race Day is one of Bestway Wholesale’s largest corporate events in the calendar, supported by supplier partners for over 30 years. Over 27 charities have benefited from funds raised through the event since it began in 1994, including The Duke of Edinburgh’s Award, widely recognised as the world’s leading youth achievement award.
Lord Choudrey explained why the business has chosen The Duke of Edinburgh’s Award as its charity partner this year:
“Charity is at the core of what we do at Bestway, and our annual Charity Race Day cements the ongoing work to such great organisations such as The Duke of Edinburgh’s Award by our family.
“We have worked with The Duke of Edinburgh’s Award for over 30 years and take great pride in the Gold Partner status we hold. During this time we have experienced first-hand the incredible work the charity does in preparing our young people for the future in whatever role they undertake.
“The Duke of Edinburgh’s Award inspires and empowers young people, supporting them as they learn new skills, overcome obstacles, whilst helping them build confidence and resilience. This charity ties in with our other efforts to recognise the importance of supporting initiatives that invest in the future of our youth.”
Bestway Foundation was established by Sir Anwar Pervez in 1987, as the charitable arm of the Bestway Group, with a philosophy to support less fortunate people through the advancement of education and healthcare. Since inception Bestway Foundation has donated more than £35m to charitable causes, including donations to charities, hospitals and schools as well as the funding of university scholarships. Bestway Group has donated more than £15 million to the Bestway Foundation in the UK.
Dawood Pervez, Managing Director of Bestway Wholesale, said: “We are delighted to support the work of The Duke of Edinburgh’s Award which has seen participation in the Award grow every year since inception. Millions of young people from across the UK in schools, community groups, young offender institutions and workplaces have had the opportunity to build resilience and gain lifelong belief in themselves through the DofE.
“Understanding that our donation will help young people to challenge themselves to attain standards of achievement and endeavour in a wide variety of active interests – to serve their communities, experience adventure and to develop and learn outside the classroom, really aligns with the values of The Bestway Foundation.”
“The Annual Ascot Charity Race Day is just one of the ways that Bestway Foundation gives back, and we are incredibly grateful to our supplier partners and colleagues for supporting this annual event and donating generously to ticket purchases, the Charity Auction and other fundraising activities.”
Alex McDowell, DofE Fundraising Director, commented on the donation:
“We are delighted to receive this incredibly generous donation to support the DofE’s vital work. The money raised will support the charity’s Resilience Fund which offers free DofE places, bursaries or additional support for marginalised young people facing barriers to participation including financial constraints, additional needs or caring responsibilities.
“The DofE equips young people with the skills, confidence, and self-belief to help them take on today’s toughest challenges. We want to ensure every young person has the chance to take part, no matter who they are or where they live. This generous donation will enable us to continue reaching more young people with a life-changing DofE.”
The Lord Choudrey concluded:
“Charity is at the core of what we do here at Bestway – we are extremely dedicated to our social responsibility and incredibly committed to giving back to the communities within which we operate.”
As we head into the busiest time of the year for the grocery industry, GroceryAid is urging people to reach out to them if they find themselves struggling.
The charity helps grocery workers and their families through difficult times and offers a range of financial, emotional and practical support. This includes support for people facing stress, anxiety, low mood or loneliness, as well as debt advice and impartial financial support through GroceryAid’s online financial hub.
“The festive period is a golden time for the sector but of course, along with an increase in trade comes an increase in pressure," said GroceryAid CEO Kieran Hemsworth. "Across the industry, workers are stepping up the pace to keep shelves stocked and customers happy. We know this can sometimes lead to feeling overwhelmed, especially when everything else, from social engagements to family responsibilities are also at full throttle.
“This is a reminder that if you’re struggling this year, we are here for you.”
GroceryAid’s free confidential Helpline is available 24/7, 365 a year and is answered by trained counsellors – even on Christmas Day. Call 08088 021 122 or visit groceryaid.org.uk/get-help