Coffee and cocoa on track to be largest commodity gainers of 2024

Coffee and cocoa are expected to be two commodities with some of the largest price hikes this year, after both products experiencing significant worldwide shortages. 

Cocoa prices have jumped 167.89% year-to-date, whereas coffee prices have surged 68.42% this year. 

According to ING, cocoa's 2023-2024 marketing year experienced the worst worldwide supply deficit in six years. This was mainly because of poor weather across some of the most important cocoa producing countries in the world this year, which led to disappointing harvests, especially due to the rise of crop diseases. 

ING said on its website: "The 2023/24 marketing year saw the global cocoa market register a deficit of 478kt, the largest in over 60 years and also the third consecutive year of deficit. This shortfall was driven by crop failures in West Africa, particularly Ivory Coast and Ghana. 

"The deficit drove global cocoa stocks to the lowest level in more than a decade. While prospects for the 2024/25 marketing year are looking better, there are still concerns over weather developments in West Africa and what it could mean for output this season. 

"Forecasts currently show that West African output – which accounts for more than 70% of global output – will edge higher. However, there are risks to this due to recent poor weather."

Apart from poor weather, cocoa crops were also affected by other challenges such as slower new plantings and aging cocoa trees. 

Global trade uncertainties are expected to keep affecting the commodities market next year, with the possibility of tariffs looking increasingly likely, as tensions between the EU and US, as well as the EU and China continue to heat up. If so, cocoa prices are likely to remain somewhat volatile next year. 

Alth