Cocoa price gains strength and surpasses that of copper – 03/25/2024 – Market

The price of cocoa extended its rise — surpassing US$9,000 per ton for the first time in history — as supply shortages affect the market and chocolate makers struggle to purchase beans.

Futures are up about 50% this month alone and have more than doubled this year. Poor harvests due to bad weather and disease on farmers’ plantations in West Africa, where most of the world’s cocoa is grown, and few signs of improving production elsewhere have left the sector in a difficult situation.

The rally has pushed prices toward $10,000, a level that seemed unimaginable just a few months ago — and even made cocoa more expensive than the metal copper.

The advance in cocoa will be reflected in higher chocolate costs throughout the year. Easter eggs are already becoming more expensive due to last year’s price rise, and some manufacturers are reducing bar sizes or promoting varieties with other ingredients to soften the impact.

Futures rose as much as 2.8% to $9,188 in New York, despite a financial market indicator showing it has been overvalued for most of the past few months. In London, cocoa also rose.

“Chocolate could become even more expensive by Easter 2025 if cocoa tree diseases and adverse weather conditions prolong the deficit amid high sugar prices,” Bloomberg Intelligence analyst Diana Gomes said in a note on Friday. fair.

Although prices have soared, speculators have withdrawn from the market. Open interest — the number of open contracts — has fallen from a peak in late January, and fund managers cut their net bullish bets to a one-year low last week. This suggests that physical buyers may have played a key role in driving up prices.

And there is a risk that the supply situation will worsen. New European Union rules — aimed at preventing products from deforested regions from being sold in stores — could make it even more difficult for major chocolate makers to secure raw materials.

The focus now turns to West Africa’s upcoming mid-season harvest, the smaller of the two annual harvests. The sector’s regulator in Ivory Coast, the world’s biggest producer, expects it to decline this season, Bloomberg reported earlier this month.