Cocoa Prices Set to Continue Climbing into 2024 After a Strong 2023

Forex - Cocoa and coffee are set to finish 2024 as the top performers among commodities due to a global supply deficit. Cocoa prices have surged by 170% year-over-year. The price of cocoa is expected to nearly triple in 2024, outpacing increases in other commodities. Earlier this month, cocoa reached a record level of $12,931 per metric ton in New York, and yesterday, it rose by 14% in New York, marking the largest daily increase since May. In London, cocoa prices also increased by 14%.

Ole Hansen, the head of commodity strategy at Saxo Bank in Copenhagen, stated, “The softs sector, led by cocoa and coffee, has been the primary beneficiary of adverse weather conditions in major growing regions, emphasizing the price risks when such products are produced and supplied from relatively small geographical areas.”

The largest cocoa producers, Ivory Coast and Ghana, have experienced crop losses due to unfavorable weather, bean diseases, smuggling, and the reduction of planting areas for illegal gold mining.

Drought has also strained coffee supplies. ICE Arabica coffee prices have surged to their highest level in over 40 years, driven by concerns that the severe drought earlier this year could harm the upcoming crop in Brazil, the largest producer. Coffee prices are up 71% year-over-year.