Major trading houses are at risk of losing about $1 billion due to Ghana’s failure to deliver cocoa beans this year.
This development sources say 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 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 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.
