Investment Manager Predicts Cocoa Prices to Surge Over 125% by 2024 – Find Out Why
LONDON – Cocoa prices are expected to continue their upward trend this year due to persistent supply shortages, with a Reuters poll of 12 traders and analysts projecting prices to more than double by the end of 2024.
The poll’s median forecast shows cocoa ending the year at 7,600 pounds a metric ton, a 40% increase from Tuesday’s close and a 125% jump from the end of 2023.
Record peak prices of nearly 10,000 pounds were reached in mid-April, driven by major crop issues in Ivory Coast and Ghana, which account for 60% of global cocoa production.
The poll also predicts a record global deficit of 475,000 tons in the current 2023/24 season, signaling further price increases in the near future.
Despite expectations of a small surplus next season, prices are likely to remain high as global stocks have been depleted after three consecutive seasons of deficit.
Experts anticipate continued production challenges in the coming years due to climate uncertainty and disease outbreaks in key cocoa-producing regions.
Citi forecasts prices to “normalise in a still historically high $4,000-6,000/t range over the next 12-15 month period” as the market transitions into surplus.
Production in Ivory Coast is expected to recover to 2 million tons next season, while Ghana’s crop is projected to increase to 640,000 tons in 2024/25.
New York cocoa prices are forecasted to end the year at $8,600 per ton, reflecting a 27% increase from Tuesday’s close and a 107% rise on the year.
Analysis:
Cocoa prices are expected to surge over 125% by the end of 2024 due to persistent supply shortages and record global deficits. This trend is driven by major crop issues in Ivory Coast and Ghana, the world’s top cocoa producers. Experts anticipate high prices to remain in the near future as global stocks have been depleted after several seasons of deficit. Investors should be prepared for continued price increases and production challenges in the cocoa market.