Hershey Co Requests CFTC Permission to Buy 90,000 Tons of Cocoa
Chocolate maker Hershey Co has asked the Commodity Futures Trading Commission (CFTC) for permission to purchase up to 90,000 metric tons of cocoa from the stocks of the Intercontinental Exchange (ICE) exchange, far exceeding the current position limit set by the CFTC.
According to a report from Bloomberg News, Hershey wants to buy the cocoa using futures contracts, which would equal 9,000 contracts. The current position limit set by the CFTC is 4,900 contracts.
Hershey did not confirm or deny making the request, but stated that it is “well covered” for its cocoa needs for 2025. The company’s shares fell 2.6% in late trading on Wednesday.
The CFTC declined to comment on the request, but a U.S. cocoa broker said that if the CFTC were to grant the request, it would empty the ICE certified cocoa stocks, leaving none for other market participants. A second broker, working for a New York firm, expects the CFTC to reject the request.
The potential clearance of the request would have significant implications for the cocoa market, with the ICE New York stocks currently holding around 61,000 tons and the London stocks holding close to 21,000 tons.