Tridge summary
In 2024, the global cocoa market experienced a significant upturn, with prices nearly tripling due to a combination of factors, including adverse weather conditions and a severe crop disease in West Africa, the world's leading cocoa-producing region. This surge has made cocoa's price increase outpace that of other commodities, including bitcoin, and has led to a scarcity of futures liquidity, exacerbating the market's volatility. The situation is further complicated by the struggle to fulfill contractual obligations in Ivory Coast and Ghana, the top cocoa-producing countries, and the strategic purchasing by chocolate manufacturers to secure future supplies at rising costs. Despite challenges such as reduced cocoa butter demand and efforts to shift to alternative ingredients, the market remains tight with a small safety net, poised for potential price spikes amidst uncertainties in production and demand dynamics.
Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.
Original content
(Dec 22): Cocoa’s rally has soared past all major commodities in 2024, and there’s little sign the tight supply and fragile trading landscape that prompted its near-vertical trajectory are in for a fast fix. Prices have almost tripled as faltering production in West Africa — the world’s biggest growing region — spurred massive supply shortages. Many traders, burned by soaring costs to maintain positions, fled the market as the rally gained steam, and chocolate makers sat out hedging new inventory in a bid for lower prices. But harsh weather and a virulent crop disease have raised fresh concerns about this season’s harvest, lifting New York futures to an all-time high of nearly US$13,000 (RM58,609) a tonne just this week. However, in a market that could continue rallying, some chocolatiers aren’t waiting anymore to lock in prices. The already-low futures liquidity is also adding to the wild swings, sending cocoa’s gains even beyond bitcoin. “At these levels it’s all pain,” said ...
Source: Theedgemarkets
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