Cocoa Prices Top All-Time Record Highs. And This Could Just Be The Beginning!

Phil Carr
Published: Feb 9, 2024, 18:10 UTC

Another week and another Commodity skyrockets to all-time record highs.

Crude oil barrels, FX Empire

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That’s one of the most lucrative trends of the current Commodities Supercycle, that we find ourselves in right now!

A long list of the world’s most powerful Wall Street banks have described the current economic climate as “The Golden Age of Trading”.

This comes as no surprise, given today’s highly macro-driven backdrop is fuelling one of the greatest wealth creation opportunities the world has ever seen.

Cocoa Prices Skyrocket: Record-Breaking Surge Amid Climate Crisis

Right now there is one Commodity that is smashing records almost on a daily basis.

And that’s Cocoa.

Cocoa prices soared over 21% this week, registering a new all-time high of $6,030 per tonne –surpassing their previous peak set in 1977 – amid the impact of rising shipping costs due to disruptions in the Red Sea and the consequences of the global climate change crisis.

Cocoa prices are now up 40% since the start of this year and have more than doubled over the past 12-months.

According to analysts at GSC Commodity Intelligence – the world is currently experiencing one of the strongest El Nino climate events of the last 50 years. This natural phenomenon occurs when tropical eastern Pacific sea surface temperatures rise at least 0.5 degrees above their long-term average.

This can have disastrous consequences on crops as result of prolonged dry spells and droughts, impacting production. Last year, this phenomenon caused 2023 to be the hottest year on record. Now, 2024 could well be poised to overtake that record.

However, here’s where things really start to get interesting.

Last year, El Nino weather conditions in the world’s top Cocoa producing countries pushed the global Cocoa market into a third year of deficit for the 2023/24 season.

Conclusive evidence shows a major crisis is underway in the Cocoa sector and any kind of surplus that might have existed in the sector has now gone. But that’s just one bullish tailwind.

Red Sea Shipping Disruptions Fuel Cocoa Crisis: Opportunity Amidst Chaos

Elsewhere, the Impact of shipping disruptions in the Red Sea is acting as a further bullish tailwind due to surging freight costs and longer-than-usual travel times. The longer the Red Sea crisis goes on – the higher prices will go – inevitably opening the door to a major supply squeeze.

Whichever way you look at it, one thing is clear. Right now we have crisis on top of crisis, which as traders know – translates to opportunity on top of opportunity. While Commodities certainly don’t need a crisis to move higher, they definitely love a crisis”

Commodity Price Forecast

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

About the Author

Phil Carrcontributor

Phil Carr is co-founder and the Head of Trading at The Gold & Silver Club, an international Commodities Trading, Research and Data-Intelligence firm.

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