Cocoa is more expensive than copper

Mar25,2024



cocoa extended its growth – crossing $9,000 per tonne for the first time – as a supply shortage captures the market and chocolate maker Scramble for the beans.
Futures have increased by nearly 50% this month alone and have already more than doubled this year. Poor yields due to bad weather and crop disease among West African producers, where most of the world's cocoa is grown, and little sign of a reprieve in production elsewhere have plunged the industry into crisis.
The rally has pushed prices to $10,000 – a level that seemed unimaginable just a few months ago – and even pushed the price of cocoa higher. expensive Compared to bellwether industrial metal copper,
Cocoa advances will increase the cost of chocolate throughout the year. Easter eggs are already becoming more expensive due to a surge in prices last year, and some manufacturers are curbing bar sizes or promoting varieties with other ingredients to soften the blow.
Futures in New York rose 2.8% to $9,188. Prices have been rising despite technical gauges being in the overbought zone for the past few months. Coco also went up in London.
“If cocoa-tree diseases and bad weather exacerbate losses amid higher sugar prices, chocolate could be even more expensive by Easter 2025,” Bloomberg Intelligence analyst Diana Gomes said in a note.
While prices have risen, speculators are actually pulling out of the market. Open interest – the number of contracts outstanding – has fallen from its peak in late January, and money managers cut their net-bullish bets to a one-year low in the latest week. This suggests that physical buyers may have played a significant role in the price rally.
There is a danger of the supply situation worsening. Coming EU rules – aimed at preventing forest-destroying products from being sold in stores – could make it even more difficult for the bloc's top chocolate makers to secure supplies.
The focus now turns to West Africa's upcoming mid-season harvest, the smaller of the two annual crops. The regulator for top producer Ivory Coast expects a reduction this season, Bloomberg reported earlier this month.



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