Cocoa prices reach new high, close in on $9,000 per metric ton.
The hottest trade of 2024 is expected to be cocoa, which may not get as many headlines as other commodities.
Since the beginning of the year, the price of metric tons has more than doubled and is now close to $9,000 per ton. On Friday, the price reached a new record high, increasing by 2.8% to $8,789 per ton. Additionally, the price has increased by over 10% for the week.
When 2024 began, cocoa was trading below $4,200 per ton.
The reason for the sudden increase in price is due to disruptions on both the supply and demand sides.
The severe El Niño-induced dry weather conditions and reported wildfires have reduced cocoa supply, while demand has remained high in countries like the United States. This has helped companies such as Hershey's and Mondelez better manage their rising prices by passing them onto consumers.
It seems that the dry weather will persist for some time.
The Ivory Coast's rainy season usually lasts from April to October, but the region is currently experiencing unusually high temperatures, which could prolong its drought, according to Reuters. This could negatively impact the size and quality of beans produced, ultimately affecting the supply of cocoa in the future.
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