Hershey seeks permission to purchase cocoa above CFTC limits amid supply shortages 

USA – Hershey Co., the U.S. chocolate maker, has requested approval from the Commodity Futures Trading Commission (CFTC) to purchase a significant amount of cocoa from the stocks of the ICE exchange, exceeding the current position limit.  

The company aims to acquire up to 90,000 metric tons of cocoa, equivalent to 9,000 futures contracts. This is nearly double the CFTC’s existing limit of 4,900 contracts. 

According to a report by Bloomberg News, Hershey, which is already well-covered for its cocoa needs in 2025, seeks this increased purchase due to the ongoing cocoa supply shortages.  

Cocoa prices have soared in 2024, driven by adverse weather conditions and diseases in Ivory Coast and Ghana, the world’s largest cocoa producers, which together account for more than 60% of global cocoa supply. 

The request comes at a time when cocoa stockpiles are dwindling. ICE New York stocks are currently at around 61,000 tons, while London stocks stand at about 21,000 tons.  

A U.S. cocoa broker, speaking to Reuters, noted that Hershey’s proposed purchase would deplete ICE’s certified cocoa stocks, potentially drying up liquidity in the futures market.  

The broker added that such a move could be detrimental to other market participants. 

The global cocoa market has been facing a fourth consecutive year of supply shortages, with stockpiles in warehouses falling over 70 percent since May 2023.  

Cocoa prices hit multiple record highs in 2024 after disease and poor weather wiped out cocoa crops in Ivory Coast and Ghana, which account for more than 60% of global supplies. 

Production of cocoa is also expected to decline by 14 percent in the 2023-2024 season, down from 4.9 million metric tons in 2022-2023 to an estimated 4.2 million metric tons. 

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