If you thought the insatiable AI GPU demand was (and is, and will continue) nuts, well… the cocoa beans market is in trouble, with the price of cocoa beans skyrocketing. The price of cocoa beans has smashed through $10,000 a ton for the first time in the futures market.
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The last major cocoa tree planting spree happened throughout the early 2000s in West Africa, which, if you didn’t think was important to the global cocoa business, you’re wrong: West Africa counts for around 75% of the global supply of cocoa beans. After already bad weather amplified by the ongoing El Nino phase of the Pacific Ocean, cocoa trees throughout Ghana and the Ivory Coast have been decimated.
Fast-forward to today, and the world is heading to an annual supply deficit of between 300,000 and 500,000 tons of cocoa beans, the largest shortfall in over 60 years. Right now, the price of cocoa is more expensive than copper on the commodities market, and we’re sprinting directly into Easter, which is when chocolate makers have now increased pricing for consumers after multiple years of subpar cocoa harvests in West Africa with another on the way.
If you compare NVIDIA stock to the price of cocoa beans… there’s a massive parallel happening. As NVIDIA has risen over the last year or so, the price of cocoa beans has followed right next to it. NorthmanTrader founder Sven Henrich posted on X asking “where we you when you first realized NVIDIA and the cocoa bean are in the essence the same trade”. He replied to his original post, asking “are the chips made from chocolate?” so now we need NVIDIA CEO Jensen Huang to tell us the truth, while he’s probably sipping on a coffee.