In a remarkable turn of events, cocoa beans have eclipsed Bitcoin to become the most lucrative commodity of 2024. Prices soared by an astonishing 185%, reaching $12,000 per ton, primarily driven by severe climate challenges in West Africa, the leading cocoa-producing region. The International Cocoa Organization has warned of a looming shortage of 478,000 tons of cocoa beans, exacerbating the situation.
The surge in cocoa prices outpaced not only Bitcoin, which saw a growth of 128%, but also the broader US stock market, which increased by just 25%. This dramatic rise in cocoa prices is attributed to a combination of drought, disease, and structural issues affecting production in West Africa. Reports from MarketWatch highlight that the current agricultural year has experienced the most significant cocoa supply shortage in six decades.
The climate crisis has played a pivotal role in this scenario. Record ocean temperatures have adversely impacted cocoa crops, which have already been stressed by two years of extreme weather conditions. Additionally, wet weather in October damaged cocoa trees in several areas, while hot, dry winds from the Sahara threaten upcoming spring harvests.
Despite these challenges and record-high prices, demand for cocoa remains robust as consumers continue to indulge in chocolate and coffee products. Furthermore, Arabica coffee futures have also surged to $2.68 per pound—the highest since 2011—due to a shortage of robusta beans and ongoing drought conditions in Brazil.
As the market braces for continued volatility, it remains to be seen how these developments will impact global commodity trading in the coming months.