The world’s largest cocoa producers, Cote d’Ivoire (Ivory Coast) and Ghana, have halted or scaled down processing in major plants amid soaring bean costs, Reuters reported on Thursday, saying the situation has led to a global hike in chocolate prices.

The two West African nations produce nearly 60% of the world’s cocoa. However, both have been struggling with extreme weather changes and cocoa pod diseases for months, according to a report published on Tuesday by the African Export-Import Bank (Afreximbank).

Cocoa supplies from the former French colony over the period of October 2023 to February 2024 were down by roughly 39% from the previous year, at 1.04 million metric tons, according to Afreximbank. Ghana’s exports dropped by about 35% to 341,000 metric tons between September 2023 and January 2024.

Benchmark cocoa futures for March delivery on the Intercontinental Exchange (ICE) in New York rose above $6,000 per metric ton last Friday before easing to around $5,880 per ton, still exceeding the previous record high of $5,379 set in 1977.

Bean prices are expected to rise further due to the threat to the global supply posed by the weather phenomenon El Nino, which caused droughts in West Africa in the third quarter of 2023 and is expected to last until April, industry analysts have warned.

“We need massive demand destruction to catch up with the supply destruction,” Reuters quoted Steve Wateridge, director of Tropical Research Services, as saying.

State-owned cocoa processor Transcao, which is one of Ivory Coast’s nine plants, said it is unable to purchase beans at current prices and is relying on existing stock. Global trader Cargill has also struggled to source beans for its major processing plant in Ivory Coast, shutting down operations for about a week last month, anonymous sources told Reuters.

Ghana, the world’s second-largest cocoa grower, has seen the majority of its eight plants, including the state-owned Cocoa Processing Company (CPC), repeatedly suspend operations for weeks since last October, the news agency reported. CPC has said it is only operating at about 20% capacity due to the shortage.

Last week, Michele Buck, CEO of American candy giant Hershey and one of the world’s largest chocolate manufacturers, predicted that “historic cocoa prices” will limit earnings growth in 2024, resulting in product price increases.