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Cocoa Futures Overtake Nvidia Returns Ahead of Easter

Last Updated March 27, 2024 5:28 PM
Shraddha Sharma
Last Updated March 27, 2024 5:28 PM

Key Takeaways

  • Cocoa futures hit record highs, surpassing $10,000 per metric ton.
  • Cocoa prices reportedly surged over 100% this year, competing with Nvidia stocks.
  • A survey finds that popular chocolate brands, including Maltesers, Lindt, and Ferrero Rocher, have seen prices soar by 50% or more YoY.
  • Contrarily, the overall food price inflation seems to be dropping in the US and UK. 

The Easter tradition of consuming and gifting chocolates now has a commercial roadblock. In 2024, market reports of bad weather conditions and disease outbreaks in West Africa have disrupted cocoa production. Meanwhile, Easter demand and supply disruption is leading to a surge in cocoa prices when overall food inflation seems to be low. 

The Surge Amid Easter Demand

Cocoa performance is surpassing the price action of leading stocks like Nvidia while outpacing the increases witnessed in certain cryptocurrencies. 

Cocoa Futures vs Nvidia | Source: CNBC
Cocoa vs Nvidia | Source: CNBC

With cocoa prices soaring over 100% in 2024, investors are taking note of the potential profitability of commodity markets. But with consumers preparing for Easter festivities, the soaring prices of popular chocolate brands have sparked concerns about affordability and accessibility.

Analysts find  that Cocoa prices have skyrocketed to historic levels, peaking at $10,000 per metric ton. Reports attribute this surge to supply shortages caused by challenging weather conditions and disease outbreaks affecting cocoa production in West Africa, a major cocoa-producing region.

Overall Food Price Inflation Contrast  

A consumer told CCN that chocolate as a commodity is depriving underprivileged families to use the bonding that comes with playing games and exchanging chocolates.  

The survey findings from Which?  reveal that the prices in the UK. The Maltesers Truffles Luxury Easter Egg saw the highest jump, with its price at Waitrose soaring by 62.5% from £8 to £13. Other notable increases include the Lindt Five Gold Bunny Milk Chocolate, rising by 55.5% at Asda, and the Lindt Lindor Milk Chocolate Egg, which went up by 53.8% at Tesco.

Such steep price increases come at a time when the overall food inflation seems to be in check. Kantar indicates  a significant easing in UK grocery inflation to 4.5% in March from 5.3%.

In the United States, the annual inflation rate was reported at 3.2% for the 12 months ending in February, showing  a slight increase from the previous rate of 3.1%. The consumer confidence has stayed almost  the same in March. Meanwhile, gold prices are up ticking ahead of the next inflation data but cocoa is beating metals like copper .

Meanwhile, Morgan Stanley has reportedly  lowered its rating for Hershey to “underweight” due to inflationary risk with impact set to expand to other major brands.

Chocolate Makers Concerned

As Easter approaches, the surge in cocoa prices is an interplay between seasonal demand and supply constraints. But, cocoa futures are outperforming traditional stocks, commodities, and even some cryptocurrencies.

Consumers hint at concerns regarding the accessibility of Easter treats while chocolate makers could face the risk of a supply shortage in their market rating.

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