Cocoa Crisis: Global Prices Soar 172% as Supply Shortages Hit Chocolate Industry
Staff Editor Cocoa Emerges as Top-Performing Commodity in 2024 Amid Supply Challenges
Cocoa has claimed the title of top-performing commodity in 2024, with prices soaring to unprecedented levels due to significant supply disruptions in major producing countries. The commodity experienced a staggering 172% price increase over the past year, briefly touching a record high of nearly $13,000 per metric ton in December.
The dramatic surge in cocoa prices was primarily driven by adverse conditions affecting key producers such as Ghana and Ivory Coast. These nations faced severe crop failures attributed to a combination of factors, including bean disease, floods, and reduced farmer compensation. As a result, global cocoa stocks have plummeted to their lowest levels in over a decade.
Analysts predict that cocoa prices will remain elevated well into 2025. While ING forecasts slight improvements in supply prospects for the coming year, persistent weather risks continue to pose challenges for the cocoa market. Experts suggest that maintaining high prices is crucial to manage demand and address ongoing supply uncertainties.
The cocoa market’s volatility has had ripple effects across other commodities. Coffee production in Brazil was hit hard by drought conditions, pushing arabica bean prices to a forty-year high with a 67% increase in 2024. In contrast, coal emerged as the worst-performing commodity, largely due to China’s economic slowdown and property crisis, which also impacted demand for bulk metals.
Oil markets also experienced a downturn, with Brent crude closing the year at $74.64 a barrel, marking a 3% decrease from the previous year. This decline reflects broader economic challenges and shifting energy consumption patterns globally.
As the commodity landscape continues to evolve, investors and industry stakeholders are closely monitoring these trends, particularly the ongoing developments in the cocoa sector, which are expected to have far-reaching implications for global markets in the coming year.
