If you look at commodity prices like gold, oil and grains you are seeing that prices have fallen sharply since last July. Bucking this trend is a lesser known commodity, namely cocoa, which traded at 1,820 British pounds per tonne.
The questions you are probably asking are: why is the price of cocoa so high? and what is causing this big jump in price? For the past three years and especially this year, a combination of events have come together to set this price rise in motion. First, the weather has been bad in the Ivory Coast, a leading producer of cocoa, with cold weather and heavy rains. Also there has been a disease called the black pod disease which attacks the cocoa plant. Add to this a series of strikes by farmers and finally growers used less fertilizer this year because the cost was too high. Taken together these factors caused a 40% drop in production to 251,000 tons from the Ivory Coast.. Cocoa inventories are now only 39% of global production, down 54%
If there is a lessening of demand next year, perhaps prices will level off a bit, but for now prices remain at these very high levels.
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