Cocoa lives a to rally 130% so far this year. This is the most appreciated commodity and it seems that an unsatisfactory harvest in the summer The price of cereals will continue to rise. The outlook is not at all promising, as weather conditions have not been favourable and production has been reduced by some crop diseases. The tonne of cocoa is very close to exceeding $10,000 again due to the prospects of shortages.
There are two times in the year when cocoa is harvested. Although it is the smaller of the two, one of these times is summer. But the lack of rain in recent weeks has made the situation difficult in Ivory Coast and Ghana, the two countries that hold more than half of the world’s cocoa supply. The bad weather has contributed to concerns about a market that is too tight.
The latest data underscore this deficit, as demand will exceed supply to a greater extent than previously estimated. According to data from the International Cocoa Organization (ICCO), which shares Bloombergdemand will be 462,000 tonnes higher than stocks. This is the third consecutive time that the ICCO has revised upwards its shortage forecasts.
There is still more demand for chocolate than there is for available grain, and production is not going to increase either. This season, 4.33 million tons of cocoa will be produced, almost 3% less than the previous projections of the aforementioned organization.
This situation is reflected in prices, and in the last month alone, cocoa has rebounded by 22%. In fact, the tonne is once again approaching $10,000, which has been reached this year for the first time in history. The annual maximum was reached in March at around $11,800 per tonne. Although it is still possible to return to this record, the trend is upward.
Another surprise that cocoa brought this year was to surpass the price of copper. Until this year, this had not happened since 2003. But the price of cereals surpassed that of the metal in the spring and, currently, the surprisewhich explains the magnitude of to rally of chocolate.
Among the most traded commodities in the world, cocoa takes the place of the most expensive in 2024. The increase in the price of gold, orange juice, coffee or aluminum alloy is not comparable to that of chocolate. The increase in orange juice is in double digits this year, 55%, but it is far from the 130% increase in cocoa.
Of course, the trajectory of this commodity means that its profitability has largely exceeded that of the S&P 500 or the Nasdaq 100, to name just two indices. Cocoa is facing resistance from Nvidia, one of the favorite stocks of the year, whose high price 238% eclipses that of the raw material, which has few rivals.
