Cocoa's Price Gain Beat Bitcoin

In December 2024, U.S. cocoa futures prices broke through USD 12,000 per ton, nearly tripling from the beginning of 2024.
This is a far higher rate of increase than Bitcoin, which was red-hot in 2024.
What is the main reason cocoa prices have risen so much?
West Africa is the key region that produces more than 70% of the world's cocoa.
This year, however, cocoa production in the region fell due to extreme weather such as heat waves and heavy rains caused by El Niño.
It is only natural that prices rise when supply falls.
Cocoa is a commodity traded on the U.S. ICE futures exchange, and its price affects the prices of cocoa-related foods.
According to Bloomberg, confectionery makers are reducing cacao content due to soaring cocoa prices.
However, if cocoa prices keep rising or stay at current levels, there will be no real option other than raising product prices.

As an example, the American chocolate company Hershey reported disappointing third-quarter results due to the rise in cocoa prices.
Its results were poor because costs increased as raw material prices rose.
From an investor's point of view, if cocoa prices keep rising, one can only be negative about investing in related confectionery companies.
Those who bet on cocoa since the beginning of the year will have earned remarkable returns. But investing always requires caution.
News and blogs on cocoa forecast that cocoa prices will not fall easily, as climate change looks set to intensify with global warming.
But this is only a forecast, since no one knows whether the weather will be extreme again in 2025.

Also, if cocoa prices continue to rise, related companies may develop substitutes for cocoa more quickly and resolve the supply shortage.