Mondelez stock, revenue flies despite the sugar, cocoa prices surge

Soaring sugar and cocoa prices are not impacting big chocolate. Mondelez (NASDAQ: MDLZ) stock price jumped by over 2% after the company published strong financial results. In all, the shares have jumped by over 28% from the lowest point this year and is hovering near the all-time high.

Mondelez, which owns brands like Alpen Gold, BournVita, Oreo, and Cadbury, recorded strong topline and bottom-line results. Its revenue jumped by 15.7% in the third quarter and by 17% in the first nine months of the year.

Mondelez’s revenue rose across all geographies. Its Latin American revenue jumped by 35.1% while its European and North American sales rose by 15.4% and 11.4%, respectively. These sales jumped even as these countries went through major challenges such as high inflation and interest rates.

The company’s performance came at a time when most of its inputs are getting more expensive. According to TradingView, Cocoa price surged to $3,855, which was 76.17% from the lowest level in 2023. It has rallied by over 120% from its 2021 lows.

Cocoa is a key ingredient for most products that Mondelez sells like chocolate bars. As such, as its price rises, the company is seeing its costs jump. Fortunately, because of its strong brand and scale, it is able to adjust sale prices.

Cocoa price has soared because of the ongoing supply and demand dynamics in Ivory Coast and Ghana. While demand is still rising, supply has come under pressure recently because of the Cacao Swollen Shoot virus.

Sugar price has also soared hard in the past few months. A cash contract has risen to $27, which was almost 200% above its pandemic low. As with cocoa, Mondelez and other chocolate companies like Mars and Hershey use a lot of sugar across their product lines.