Cocoa and coffee are set to finish 2024 as the leading gainers among commodities for a second consecutive year due to a global supply shortage.
Major cocoa-producing countries, Côte d’Ivoire and Ghana, have experienced crop losses caused by adverse weather conditions, bean diseases, smuggling, and reduced farmland. This is unfortunate for chocolate lovers, as cocoa prices nearly tripled throughout 2024, significantly surpassing increases seen in other commodities.
Earlier this month, it reached an all-time high of $12,931 per metric ton in New York, driven by predictions of declining supply for the fourth consecutive season in West Africa due to dry conditions.
Ole Hansen, the head of commodity strategy at Saxo Bank in Copenhagen, noted, “The softs sector, dominated by cocoa and coffee, has been the primary beneficiary in light of adverse weather in crucial growing areas, underscoring the price risk associated with products sourced from relatively small geographical regions.”
Coffee supplies have also been strained by dryness. Prices for ICE Arabica coffee surged to their highest levels in over four decades amid concerns that extreme drought earlier this year harmed the impending harvest in Brazil, the leading producer.