Cocoa beats bitcoin: 2024 record-breaking with prices up 170 per cent

2024 was a record year for cocoa and coffee prices. The two commodities were particularly affected by the difficult weather conditions that characterised the entire year and pushed up prices. In that order, cocoa, which closed at $11,241 in New York yesterday, has risen around 170% since opening on 1 January 2024, outperforming even trending assets such as Bitcoin (+120% since the start of the year). This was influenced by a supply that was struggling due to unfavourable weather conditions and a concomitant demand that was not particularly affected despite rising costs.

In detail, Côte d'Ivoire and Ghana, which together account for around 60% of the world's production, suffered from a succession of excessive rains, winds and the spread of diseases in the plantations. In particular, the sprout swelling virus hit Ivorian crops hard, reducing yields by 25-30%. This drop in production contributed to a 13.1% drop in overall production and a 26.8% drop in end-of-season stocks, increasing volatility and pressure on already highly stressed prices. In contrast, on the demand side, global cocoa consumption remained solid despite the increase in costs.

Similar fate for arabica coffee, which reached its highest level in 50 years: in New York yesterday it closed at 321 cents, the highest level since 1977, marking an increase since the beginning of the year of about 78%. Once again, bad weather conditions are pushing prices up. Fears of bad harvests, particularly in Brazil, the world's largest coffee producer, have pushed producers to hold back their beans, despite strong demand. In addition, geopolitical factors such as shipping disruptions in the Red Sea, potential US tariffs and future EU regulations on deforestation are helping to support commodity prices in general and coffee in particular. (Il Sole 24 Ore Radiocor)