Major
trading
houses
are
at
risk
of
losing
about
$1
billion
due
to
Ghana’s
failure
to
deliver
cocoa
beans
this
year.
This
development
according
to
Citi
Business
News
sources
has
forced
traders
to
exit
short
positions
as
cocoa
prices
surge.
Ghana
plans
to
delay
delivering
up
to
350,000
metric
tons
of
cocoa
beans
this
season,
nearly
half
of
what
was
sold.
This
delay
could
cost
cocoa
traders
and
processors
around
$1
billion
in
total
losses,
according
to
Citi
Business
News
sources.
Large
trade
houses
like
Cargill,
Olam,
and
Barry
Callebaut
use
futures
markets
to
lock
in
cocoa
prices
they
haven’t
yet
sold.
They
buy
beans
months
in
advance,
hoping
to
resell
at
a
profit.
To
protect
against
price
drops,
they
also
bet
on
price
falls
in
the
futures
market.
This
strategy
fails
if
cocoa
delivery
is
delayed
in
a
rising
market.
According
to
Citi
Business
News
sources,
traders
had
to
buy
back
their
bets
on
price
falls
at
much
higher
prices,
leading
to
significant
losses.
The
Traders
still
expect
to
get
their
cocoa
and
have
taken
new
short
positions
for
May
2025
delivery
at
around
$7,000
a
ton.
However,
they
are
expected
to
still
face
losses
of
$4,000
a
ton
if
they
receive
the
physical
cocoa
at
$3,000
a
ton.
The
cocoa
market,
facing
a
third
year
of
deficit,
has
seen
prices
double
this
year.
Traders
may
charge
chocolate
makers
higher
prices
to
recover
some
losses,
but
these
companies
might
struggle
to
pass
on
costs
to
consumers
already
buying
less
chocolate.
Market
liquidity
has
also
decreased
as
exchanges
require
more
cash
collateral
to
cover
hedges,
increasing
price
fluctuations.
This
situation
has
caused
trading
in
the
cocoa
market
to
slow
down
significantly,
affecting
both
the
industry
and
consumers.