Statista: Forget Nvidia! Cocoa beans bring higher yields

Up more than 80% since the start of the year, shares of Nvidia Corp. were one of the engines behind the 2024 stock market rally, according to a Statista analysis. It shows that the momentum in shares of the US chipmaker, which has benefited from the rapid growth of AI like several other companies, was based on the reported record results.

But despite the fact that Nvidia is one of the best performing stocks in the S&P 500, and that stock index has broken record after record this year, there is an even better investment that could be made in January 2024: cocoa beans. That's because the price of cocoa beans, the most important raw material for making chocolate, has risen more than 120% this year, with cocoa futures temporarily trading above $10,000 a tonne this week.

The analysis shows that cocoa bean prices will remain high for some time, and consumers will likely start feeling the effects later this year as producers pass those costs on to them either in the form of higher prices or packaged products smaller, at the same price.

• The price of cocoa beans gained 255% in one year

The futures price of cocoa beans has risen by more than 150% on the New York market in the last three months, and from March 2023 until now, it has gained 255%, as a result of the decrease in global supply. Profile crops are affected by unfavorable weather conditions, such as prolonged drought and heavy rains, but also by diseases that cause cocoa trees to be cut down. It should be noted that newly planted trees need three to five years to produce cocoa, so the supply in the next 2-3 years will probably be lower than the average of the last 15-20 years, which will support the price advance cocoa beans.

A recent analysis by the Anadolu news agency shows that the price of cocoa beans rose by more than 61% last year, becoming the raw material with the highest growth after uranium, also surpassing the copper quotation this year, which is around 9,000 dollars per ton. Yesterday, the quote for cocoa beans for delivery in May was $9,344 a ton on the US market, at 07:13 local time, 1.9% lower than the previous day.

Two months ago, cocoa beans traded at less than $5,000 per tonne on the New York market, and a year ago they were quoted below $3,000. Cocoa futures in London have doubled since early February and tripled from last year.

According to the analysis company GlobalData, the supply of cocoa will decrease by 8% in the 2023-2024 agricultural season, compared to the last 12 months, the main reason cited being the problems in the major producing countries - Ivory Coast and Ghana, which generate 60% of global production in profile. Cocoa factories in these countries decided to reduce or stop production because they could not cover the costs of the seeds.

A significantly lower cocoa harvest is expected in Ivory Coast, which provides 45% of the global cocoa supply. At the same time, the harvest in Nigeria is far below expectations.