Long
Cocoa Crisis 2024 skyrockets prices, outperforming S&P500
The price of cocoa has risen 130% this year, making it the most revalued commodity, surpassing even copper. There are two times of the year when cocoa is harvested, and poor rains and crop diseases have dented the crop in Côte d'Ivoire and Ghana, responsible for more than half of the world's cocoa supply, pushing prices higher.
The latest estimates from the International Cocoa Organization (ICCO) point to a shortfall of 462,000 metric tons, with demand exceeding supply. This is the third upward revision to the shortage this year, driven by adverse weather conditions and persistent demand for chocolate.
Cocoa, which touched an all-time high of $11,800 per tonne in March, is threatening to break above $10,000 again, reflecting a tense and tight market. The cocoa rally not only eclipses other commodities not only food commodities but also some metals such as copper or aluminum, but also outperforms the major stock market indices. This year, the orange is up 55%, a far cry from the 130% rise experienced by cocoa. It is eclipsing the performance of the S&P 500, the world's benchmark index, which has shown a return of around 23% in 2024.
Looking at the chart it can be seen that currently the checkpoint zone (POC) is located around 7660 points and the RSI is located in the middle zone slightly overbought at 51.88%. Seeing the falling formation since April, with two successful attempts to pierce the 8697 points range in May. If this psychological zone is pierced we could see a climb towards highs accompanying the previously mentioned shortage news in a year with many price convulsions.
Ion Jauregui - ActivTrades Analyst
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