Cocoa, an unlikely commodity, has become the best-performing asset of 2024, surpassing bitcoin, the U.S. stock market, and other commodities such as gold. Experts predict that prices will likely continue to rise due to relentless demand and climate adversities.
Neither Bitcoin nor Gold: Cocoa Rises as the Top Commodity of 2024
2024 was a great year for investors, who were able to reap earnings from stocks, digital currencies like bitcoin, and even commodities like gold. Nonetheless, an unlikely commodity took the crown as the best-performing asset of 2024: cocoa.
Cocoa, an agricultural commodity and precursor to chocolate, enjoyed a remarkable year, with prices rising by 185% and a positive forecast for the coming year. March futures for a metric ton of cocoa reached close to $11,960, spearheading the price hike charge for soft commodities.
The 2025 forecast for cocoa is very similar to the conditions presented last year. The record-high ocean temperatures and the expected dry winds are likely to keep affecting cocoa crops, which will diminish the harvested volumes. “This will strain nearby supplies even further, but we are at historic high prices and the question becomes whether consumer demand will slacken off at some point,” told James Roemer, publisher of the Weatherwealth newsletter.
Other analysts state that chocolate, due to its almost universal acceptance and status, has an inelastic demand compared to other products. Current demand levels have allowed prices to rise over 25% just in December.
The cocoa situation in Africa has affected the currencies of countries that are natural exporters. This is the case of Ghana, whose currency suffered earlier this year due to its poor cocoa output.
Read more: Ghana’s Cedi Hits Record Low Against US Dollar Amid Cocoa Output Decline
Other soft commodities, which are grown instead of extracted, have also enjoyed a positive 2024. Coffee, an American favorite, has also been trading on the rise, having climber over 70% pushed by adverse dollar prediction and a projected output reduction in countries like Brazil and Vietnam.
Prices of orange juice concentrate, another soft commodity, reached historic levels back in August, pushed by poor harvests affected by citrus greening, a disease that has decimated these crops in Brazil and California.
Read more: Orange Juice Futures Hit All-Time High Numbers Amidst Agricultural Commodity Rally