- Cocoa prices are hovering near historic highs around $8,000 per metric ton.
- The chocolate commodity has outperformed bitcoin in the last year, gaining more than 200%.
- A bad harvest and lack of investment have sent cocoa prices higher over recent months.
Bitcoin isn't the only asset that's been breaking records with triple-digit gains over recent months — cocoa's 186% gain over the last 12 months has eclipsed bitcoin's roughly 150% climb in the same stretch.
At the end of last week, cocoa futures touched a record $8,018 per metric ton. The commodity has pared gains since, but it remains near all-time highs due to weaker crop yields in West Africa, political instability in some of the top-producing countries, lack of investment in new cocoa plants, and imbalanced supply and demand.
The S&P GSCI Cocoa index is up 206% over the last 12 months, and up more than 90% year-to-date.
Roughly three-fourths of the world's cocoa, per Bloomberg, comes from four countries in West Africa: Ivory Coast, Ghana, Cameroon, and Nigeria. Processors in the region have had to halt or slash production because beans have become so expensive, Reuters reported.
As a result, cocoa markets this season face a supply shortfall of about 374,000 tons, data from the International Cocoa Organization shows. The group estimates global cocoa production could decline by 10.9% to 4.45 million metric tons during this crop season.
Commercial chocolate prices have increased in kind. In 2023, US retail stores charged 11.6% more for chocolate products than the prior year, Circana data cited by Reuters shows.
Last month, chocolate giants Hershey and Cadbury both warned of potential price hikes for consumers in light of the cocoa supply shortage.
The cocoa craze has pushed the commodity to outpace the bull run in the world's biggest crypto, though bitcoin's rally is still impressive.
The token has long been touted by some as an inflation hedge similar to gold, making it attractive to some investors who fear the debasement of fiat currencies like the dollar. More importantly for the crypto this year, though, has been the approval of spot ETFs that have unleashed a burst of new demand. That comes at a time when the market is also gearing up for the supply shock delivered by next month's halving.