Coffee and cocoa beans - the commodities with the biggest gains in 2024

Coffee and cocoa bean futures prices have seen some of the biggest increases among commodities in 2024, fueled by a sharp drop in supply and escalating global trade tensions.

Cocoa bean prices rose by around 170% last year, while coffee prices rose by around 70%.

According to an ING analysis, taken over by euronews.com, the cocoa bean market has experienced the largest global supply deficit in the last six years in the 2023-2024 growing season. This was mainly due to unfavorable weather in some of the world's major cocoa-producing countries, which led to disappointing harvests, mainly due to the spread of crop diseases.

ING analysts say: "In the 2023-2024 crop year, the global cocoa bean market recorded a deficit of 478,000 tonnes, the largest in the last 60 years. This was the third consecutive year of deficit, driven by poor harvests in West Africa, particularly in Côte d'Ivoire and Ghana. The deficit has pushed global cocoa stocks to their lowest level in more than a decade. While the outlook for 2024-2025 is better, there are still concerns about the weather in West Africa and what that could mean for production this season. Forecasts currently show that production in West Africa - which accounts for more than 70% of global production - will increase. However, there are risks to this due to recent adverse weather."

In addition to the adverse weather, cocoa crops have also been affected by other challenges, such as slower new plantings and aging cocoa trees, according to ING.

The source cited anticipates that global trade uncertainties will continue to affect the commodity market this year, with the possibility of tariffs becoming increasingly likely as tensions between the EU and the US, as well as between the EU and China, continue to escalate. In such a context, cocoa bean prices are likely to remain somewhat volatile this year.

While cocoa producers in developing countries in Latin America and elsewhere could help alleviate the deficit in West Africa, it may take some time for this to have a visible impact.

• Coffee prices - at their highest level in history

Global coffee prices reached an all-time high of $349.58 (euro335.74) per pound (one pound = almost 500 grams) in December 2024. As with cocoa beans, this was mainly driven by adverse weather in major coffee-producing countries such as Vietnam and Brazil.

Brazil suffered fires in Sao Paulo, one of its main coffee-producing regions, as well as droughts, which further affected its crops. Another problem affecting coffee crops was low soil moisture levels despite rain, which meant that coffee trees had too few flowers but too many leaves.

Vietnam also faced a significant drought in early 2024, as well as considerable damage from typhoons, which severely affected its coffee crops.

Coffee consumption and cultivation have also been on the rise in recent months, particularly in large markets such as China. This has led to higher demand and increased pressure on supply chains, which are still recovering from the pandemic and other geopolitical challenges, such as tensions in the Middle East. This in turn has contributed significantly to the increase in prices.

• World Bank: Cocoa bean prices to fall in 2025

Cocoa bean prices rose 30% in December to an average of more than $10/kg, according to the World Bank, which estimates that global production of the crop will fall 14% in the 2023-2024 season to 4.2 million tonnes, from 4.9 tonnes in 2022-2023. Supply conditions are expected to improve in the 2024-2025 season, particularly in Côte d'Ivoire, where favorable weather in key regions could boost production by up to 17%. After an anticipated doubling in 2024, cocoa bean prices are expected to decline by around 13% in 2025 and a further 2% in 2026 as additional sources enter the market. However, the potential return of adverse weather in West Africa poses a significant price-hike risk.

The same source notes that Arabica coffee prices rose by 13% in December, or more than 60% year-on-year. Robusta coffee prices rose by 5% in December, more than doubling from a year earlier.

Global coffee production is estimated to have reached 169.8 million bags (one bag = 60 kg) in the 2023-2024 season and is expected to increase modestly to 172.4 million bags in 2024-2025, but will be below the level of 2020-2021. Coffee prices remain very sensitive to global supply risks, according to the cited source. While improved weather in East Asia has alleviated some pressure on Robusta coffee prices, Arabica production in Brazil faces significant deficits both in the current season (2024-2025) and, potentially, for the next season. According to expectations, Arabica coffee prices will fall by 8% in 2025 and stabilize in 2026. Robusta coffee prices are also expected to fall at a similar pace to Arabica in 2025, followed by a further 7% decline in 2026, the source concludes.