Agriculture Commodities Rise To 9-Year Highs, Cocoa Prices Skyrocket: Chocolate Lovers Brace For Hyperinflation
Portfolio Pulse from Piero Cingari
Agricultural commodity prices, particularly cocoa, have surged to 9-year highs, with cocoa prices increasing by 112% year to date, significantly impacting the Invesco DB Agriculture Fund (DBA) and outperforming stocks like Nvidia Corp. (NVDA). The rise in cocoa costs is attributed to supply disruptions in West Africa, leading to a global cocoa market imbalance and predictions of higher chocolate prices. The International Cocoa Organization predicts a dramatic deficit in the global cocoa market for the 2023/24 season.
March 22, 2024 | 8:26 pm
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Nvidia Corp. (NVDA) is outperformed by the surge in cocoa prices, highlighting the significant impact of agricultural commodity trends on broader market dynamics.
While NVDA is not directly impacted by the rise in cocoa prices, the comparison underscores the extraordinary performance of cocoa as a commodity. The mention of NVDA serves to highlight the scale of cocoa's price increase rather than suggest a direct financial impact on Nvidia Corp.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
The Invesco DB Agriculture Fund (DBA) has risen to $24.09, marking an over 15% increase YTD, driven by the surge in cocoa prices.
The significant increase in cocoa prices, which constitutes 21% of the DBA ETF, directly contributes to the fund's performance. Given the current market dynamics and supply disruptions, the upward trend in DBA's price is strongly linked to the surge in cocoa costs.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 90