According to rumors, the Hershey Company is requesting authorization to purchase an exceptionally high quantity of cocoa beans as worldwide supplies become scarcer and prices increase.
According to a Bloomberg story earlier this week, the Derry Township business is requesting authorization to purchase 90,000 metric tons on ICE Futures US through the New York market.
According to Bloomberg, the request is equivalent to roughly 5,000 20-foot containers, or roughly nine times the quantity that the exchange now permits.
According to Bloomberg, businesses find it more cost-effective to accept delivery through the New York exchange rather than purchasing in the physical market because of the severe global cocoa shortages.
Hershey seems to be making an effort to accumulate cocoa in order to prevent shortages.
Hershey’s request indicates that buyers of cocoa are anxious about limited supply in the physical market, according to Marc Donaldson, former managing director of Asia Pacific at Barry Callebaut AGas, who spoke to the news site.
According to Bloomberg, Hershey’s desired purchase quantity is equal to almost all of the certified or potentially certified cocoa beans in exchange warehouses that are now being delivered against futures contracts in New York.
According to Bloomberg, the company that makes Hershey’s Kisses and Reese’s Peanut Butter Cups has made the request as the market is expected to see a fourth year of supply shortages as a result of disease outbreaks and weather-related effects on harvests in Ghana and Ivory Coast.
More than 60% of the world’s cocoa supply comes from those locations, the news source stated.
Steve Voskuil, the chief financial officer of Hershey’s, warned in November that the company will have to deal with increased cocoa prices in 2025.
According to a Hershey representative who talked to Bloomberg, the company has a strict procurement procedure and will have all of its cocoa needs met by 2025.
It was anticipated that Hershey’s stock would close the week down nearly 5% after plunging as much as 3.6% on Friday.
Stories by
Sue Gleiter