A new cocoa pricing mechanism announced by top growers Ivory Coast and Ghana earlier this month is causing cocoa costs to rise, a Mondelez International Inc executive has said.
“It is fair to say that given some of the proposals that are coming out of Cote D’Ivoire and Ghana, there is a spike in cocoa cost,” said Luca Zaramella, chief financial officer of the Illinois-headquartered maker of Oreo cookies.
Both New York and London cocoa futures hit roughly one-year highs around the time of the pricing announcement, but have since slipped.
Many market participants remain uncertain as to how exactly the new mechanism will be implemented.
“Concepts like the living income differential are putting a little bit of pressure in the market. And the cost of cocoa has gone up,” Zaramella said to an analyst, declining to comment on any company plans to adjust the future pricing of its goods in Europe.