Cocoa is finishing 2024 as the top-performing major commodity, its massive annual gain driven by supply fears and market volatility.

On track for a 175% gain over the past twelve months, cocoa’s tear has been driven by a series of poor harvests in Ivory Coast and Ghana, where the majority of the crop is grown. Dwindling global stockpiles are putting pressure on both buyers and chocolate makers.

Record prices have thinned out liquidity to the lowest in over a decade, as margin calls climbed and positions became increasingly costly to hold. That low futures liquidity added to the wild swings, with prices moving more than a thousand dollars on some of the most volatile days trading days.

On Tuesday, futures in New York fluctuated following the largest daily gain since May a day earlier. The London market also moved between small gains and losses.

Weather conditions are expected to remain challenging for West Africa’s ongoing cocoa season.

“Harmattan wind speeds should be near average, but the low humidity, abundant sunshine and wind will stress some trees,” analysts at ADM Investor Services wrote in a note on Monday.

Prices of the premium arabica coffee have also gained around 65% in New York this year, breaking past the highest levels in more than forty years on fears that a drought in top supplier Brazil will hurt output next season.

Still, a drop in soybean prices traded in Chicago saw it take the spot as the worst performing major commodity in 2024. Ample production in the US and Brazil, combined with a slowdown in Chinese demand, drove prices down around 23% this year.



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