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There could be something else exuberantly pushing up Cocoa

I hope you had a great Easter. Lindt bunnies are half price today at my local supermarket. Although I live in the land of chocolate – Switzerland – I can’t help but feel how ironic these promotions are in light of where Cocoa prices are. As mentioned in previous newsletters, this is largely down to a bad harvest in West Africa, which provides 60 percent of the world supply of Cocoa.

It will probably prove temporary and the market might cool in the coming months. But it does demonstrate how vulnerable supply chains can be. There is plenty of Cocoa grown around the world, especially in countries like Brazil. This might force chocolate companies to rethink where they source this valuable commodity.

I posted this data visualisation yesterday. Yes, I know, Easter is over. But it’s still amazing how Cocoa has risen, yet also unsurprising at the same time.

Missing from this chart for instance is the price of Bitcoin and NVIDIA stocks. The point is that there are actually a lot of things rising right now and the word “everything bubble” is being used more frequently these days. Things are very calm at the moment, which is also not a good sign.

Bad harvests happen, but there could be something else exuberantly pushing up Cocoa prices, which might not be so rational. What do you think?

Source: Eeagli

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