Cocoa Tops Global Commodities Rally For Second Year

Cocoa and coffee are set to close 2024 as the biggest gainers among commodities for the second consecutive year, driven by a global supply deficit.

Cocoa prices nearly tripled in 2024, outpacing all other commodities.

Meanwhile, steel-making coal is ending as the worst performer due to sluggish growth in China, Reuters reporters Naveen Thukral and Florence Tan wrote.

Analysts predict that global trade tensions will dominate the commodities landscape in 2025 as Donald Trump returns to the White House, threatening hefty tariffs. Precious metals are expected to benefit from a strong U.S. dollar and their appeal as safe-haven assets, while ample supply could keep oil prices depressed for a third straight year.

Cocoa prices nearly tripled in 2024, outpacing all other commodities, and reached a record high of $12,931 per metric ton (MT) in New York at one point. This surge was attributed to a fourth consecutive year of lower supply in West Africa caused by dry weather conditions.

“The soft commodities sector, led by cocoa and coffee, has been the main winner amid adverse weather in key growing regions,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“This highlights the vulnerability of prices when products are sourced from relatively small geographical areas.”

Top cocoa producers Ivory Coast and Ghana have faced crop losses due to unfavorable weather, diseases affecting cocoa beans, smuggling, and the diversion of plantations for illegal gold mining.

Similarly, drought conditions earlier this year have strained coffee supplies. ICE Arabica coffee prices soared to their highest level in more than 40 years due to concerns about damage to Brazil’s upcoming crop.