This year, cocoa has seen the most significant increase among major commodity markets, even surpassing the gains of the US stock market and Bitcoin: prices for the primary ingredient in chocolate have more than doubled in 2024, reaching a new record high this month.
And the rally shows no signs of slowing down: according to ING, the 2023-24 marketing year for cocoa concluded with the largest global supply deficit in the past 60 years.
Cocoa has surged nearly 185% since the beginning of the year. The nearly 128% increase in Bitcoin and the approximately 25% rise in the S&P 500 this year pale in comparison.
The situation with cocoa remains largely unchanged: adverse weather conditions in Côte d'Ivoire continue to be a key factor, according to Darin Newsom, a market analyst at Barchart.
When analyzing cocoa futures contracts, the forward curve shows a strengthening backwardation—where near-term contracts are priced higher than those with longer expiration dates. This indicates growing concerns regarding the long-term balance of supply and demand, Newsom noted.
As long as weather issues persist, Newsom predicts that investments in the soft commodities sector, particularly cocoa, will continue to rise. In 2024, futures prices for orange juice increased by 75%, and for coffee by 73%. He stated that the current decline in cocoa prices from the April peak to the October low is a typical seasonal movement due to the start of the harvest. However, with the supply for the 2024 harvest being lower, the market has encountered new price highs this month.