2023-12-29 18:29:00
All-time highs for gold, cocoa, coffee and even the wholesale price of orange juice: the year 2023 will have been marked by serial records for agricultural raw materials and precious metals.
Gold broke its historic record in December at more than $2,100 per ounce (archives).
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At the top of the list, gold broke its historic record in December at more than $2,100 per ounce, against a backdrop of geopolitical tensions in the Middle East and expectations of rate cuts from the American Federal Reserve.
“The prospects of the Fed rate reduction in 2024 fueled much of the advance (…) in gold during the last quarter of the year,” notes Han Tan, analyst at Exinity.
The precious metal benefited from the decline in the US dollar and Treasury yields, which follow expectations of Fed rate movements, making gold comparatively more attractive.
Because the precious metal’s market is denominated in dollars, a decline in the U.S. currency also makes it less expensive for buyers using other currencies.
Cocoa with orange juice
The year 2023 was also marked by a surge in the prices of agricultural raw materials in New York and London, from coffee to cocoa and even orange juice in Chicago.
In London, cocoa reached a record price in November recorded since the start of the contract in 1989 and which therefore exceeds the previous records reached during the civil war in Ivory Coast, exploding by more than 70% in 2023.
In New York, the ton of cocoa peaked at the end of December to a record since 1977, soaring by more than 60% over the year.
“The slow start to the 2023/24 crop year in Ghana and Ivory Coast has reduced the supply of cocoa beans, leading to a surge in prices,” comments Megan Fisher, analyst at Capital Economics.
These countries generally account for 60% of global cocoa production, according to Capital Economics, and have recorded significantly lower harvests than in previous years.
Diseases and bad weather
Farmers in West Africa had also reported the development of diseases in crops after heavy rains, notably black pod disease – which causes blackening and rotting of cocoa pods.
Added to this, the El Niño climatic phenomenon has also “contributed to triggering tense market conditions and a surge in the prices of sugar, cocoa and coffee,” says Ole Hansen, analyst at Saxobank.
Produced in exposed regions, the price of robusta coffee in London was propelled in December to a new record since the start of the contract 15 years ago, with limited supply compounded by strong demand.
Also note, the wholesale price of orange juice soared in 2023 to the highest level in its history on the Chicago Stock Exchange, the result of a disastrous 2022/23 harvest due to the spread of illness and the passage of two hurricanes in 2022 in Florida, the main production region.
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