The price of chocolate’s key ingredient, cocoa, has skyrocketed this year, prompting analysts to issue fresh warnings about extreme price volatility. The New York Cocoa futures contract with March delivery traded as much as 1% higher at $11,938 per metric ton on Tuesday, notching yet another record high. The benchmark contract is up over 180% year-to-date.
The increase in price is attributed to renewed concerns about adverse weather conditions and supply tightness in West Africa, home to around three-quarters of the world’s cocoa production. The global cocoa market registered its largest deficit in over 60 years in the 2023-2024 marketing year, driven by crop failures in Ivory Coast and Ghana, the world’s largest cocoa producers.
Analysts at Dutch bank ING predict that prices will remain volatile through next year, citing persistent tightness in cocoa and coffee markets, coupled with weather uncertainty. Warren Patterson, head of commodities strategy at ING, stated that “prices are likely to remain historically elevated next year, which will be necessary to keep a lid on demand.”
Commodity markets are also volatile, according to Rabobank’s Carlos Mera, who singled out cocoa and coffee as commodities of interest to professional traders, but warned that commodity markets remain “very dangerous.” Cocoa is one of the most obscure commodities, Mera noted, while coffee has hit its highest price since 1977, with some contracts reaching record highs.