Proactive Investors - Chocolate prices are being tipped to soar after cocoa hit a new record overnight due to the impact of the El Nino weather system.
Cocoa is the main ingredient in chocolate and the price hit $5,874 (£4,655) a ton on Thursday as a dry harvest hit the harvest in key growing areas in West Africa.
US-based chocolate maker Hershey warned yesterday the soaring cost of cocoa would hit its earnings this year while giving no assurances about prices.
"We can't talk about future pricing" chief executive Michele Buck said in a call after its results yesterday, adding the company would use “every tool in our toolbox, including pricing, as a way to manage the business."
Cadbury owner Mondelez (NASDAQ:MDLZ) also highlighted a significant increase in sugar and cocoa prices in its recent update.
Harvests in West Africa have been poor recently due to prolonged dry weather and traders fear the El Nino will mean another bad year ahead.