Cocoa has been named the best-performing commodity of 2024, leaving Bitcoin in the dust. While Bitcoin has captured attention all year, especially after it soared past $100,000 in December, cocoa’s performance has been even more impressive.
Prices for cocoa, the main ingredient in chocolate, have nearly tripled since the start of the year. In January, cocoa futures were priced at around $4,000 per tonne. By mid-December, they had reached an eye-popping $12,700 per tonne. This huge price jump has been driven by a shortage of cocoa, caused by issues in West Africa, where most of the world’s cocoa is grown.
So, what’s behind the cocoa shortage? It all boils down to extreme weather and poor soil health in West Africa, which is suffering from record-breaking heat and drought. The region is also facing a fertilizer crisis, partly because many African countries rely on imports from Russia, Belarus, and Ukraine. With the ongoing war in Ukraine, fertilizer prices have soared, making it harder for farmers to keep up with the demand for cocoa.
The situation is so severe that some areas in West Africa have seen temperatures topping 40°C, breaking records in countries like Ivory Coast and Ghana, the top producers of cocoa. Add to that the fact that much of the land is degraded, and it’s no wonder that cocoa crops have suffered this year.
While Bitcoin’s price surged by about 128% in 2024, from $41,000 to $106,500, its gains pale in comparison to cocoa’s rise. Experts from MarketWatch even noted that cocoa’s performance has outshone Bitcoin, making it the star of the commodities market this year.
Looking ahead, experts predict that cocoa prices will stay high for the foreseeable future. With climate change and a lack of fertilizers continuing to impact production in West Africa, the price of cocoa is expected to stay at record levels. So, if you’re a chocolate lover, you might want to brace for even higher prices in the coming months!
In the end, cocoa’s sweet victory in 2024 is a reminder that sometimes the most unexpected assets can outperform even the most talked-about ones, like Bitcoin.
