Kisses Can Be Sweet:
It is currently being debated whether or not reciprocal tariffs will have any real impact on the consumer side of the economy but one thing is certain kisses are sweet. One might ask, WTF? What does tariffs have to do with kisses?…well.
During the last 2 years cocoa prices have risen substantially. Sixty (60) percent of the global supply of cocoa is from Ivory Coast and Ghana, two nations which have been fraught with a drought and diseases of their precious crop. Added to that equation is a new reciprocal tariff.
Over the years I have been told that one of the best investigative tools is to “follow the money”. July 23, 2025 cocoa prices were trading higher due to the slower pace of exports from the Ivory Coast (Côte d’Ivoire). Shipments from October through the week (total of 1.74 MMT), while up 6.1 % from last year, are down sharply since December. Current harvests which run through September is finding truckloads of beans (6%) being rejected as poor quality partially due to late-arriving rain. Now figure in a new 21% reciprocal tariff imposed(effective April 5, 2025) by the United States. The Ivory Coast was among the countries with the highest rates due to significant trade deficits with the US. This decision of a higher reciprocal tariff comes at a time when bilateral trade between the United States and Côte d’Ivoire is enjoying significant growth. In fact, in 2024,before the impending tariff, trade between the two countries reached $1.6 billion. U.S. exports to Côte d’Ivoire represented $596.6 million, while Ivorian imports to the U.S. were valued at $1.0 billion, generating a trade surplus of $418.1 million for Côte d’Ivoire. Trump considered this unfair to the US economy.
However, the other largest cocoa producer, the Republic of Ghana, through its Ministry of Trade, Agriculture and Industry, reports that the US tariff will be a measly 10%.Ghana will be among the least affected countries in Sub-Saharan Africa by the US tariffs announced by President Donald Trump. According to Fitch Solutions,Ghana will be ranked 42nd of the 49 Sub-Saharan Africa nations.
The major exports affected by this tariffs are: Cocoa beans, whole or broken, raw or roasted/Cocoa paste, not defatted/ Cocoa paste, wholly or partly defatted/ Cocoa powder, not containing added sugar or other sweetening matter/Cocoa butter, fat and oil/Oilcake and other solid residues, resulting from the extraction of soybean oil and (I threw this ditty in for good measure) Paintings, drawings and pastels, executed entirely by hand, of an age 100 years or less.
Still, we ponder “kisses can be sweet”…Barry Callebaut AG, the global leader in the chocolate and cocoa industry recently reduced its sales volume predictions (-9,5%) for a second time in three months. Why one might ask? Closer to home, Hersey’s expects a 15-20 million due to tariff costs and in In the second quarter Hershey’s is asking the US government for a tariff exemption on cocoa… I think you are getting the idea, but as they say on TV ads…”But wait, there is more”… “Shrinkflation” has been added to the equation.And the cost of the wrappers will be higher. Soon to be, your Valentine’s Day (Hershey’s) kisses will still be sweet, however they will be smaller and much more expensive.
…to be continued…
Oh, Ye, gentle mistresses and most distinguished gentlemen, and others… The opinions and observations are solely my own views, and I take full responsibility for any errors of fact, not to mention any predictions that prove to be wildly inaccurate.
