7Mon·

Is anyone else keeping an eye on the price of cocoa? $LCOC (-9.7%) I've been keeping an eye on it for a while. I actually wanted to get in at €50 but somehow missed it or didn't place an order.

5 Comments

Staatsmann@Staatsmann

7Mon

But how do you value a commodity like this?
With shares, this is relatively easy to do using fundamental analysis.

But with commodities?
Do you value them using demand vs. production volume and global prices?

•

Patrick Schäfer@Hotte1909

7Mon

@Staatsmann correct. Supply and demand. The last 2 years have been incredibly bad for cocoa cultivation. That's why the price has risen so much

•

Brody@Brody

7Mon

@Staatsmann
I once tried to check the factors for an entry into cocoa, but then decided that it was beyond my horizon. Unfortunately, but it is interesting.

The stock-to-use ratio is a popular key figure for commodities to reflect the current saturation of demand (stock consumption). It is also far below the average of recent years.

You would then have to weigh up how long it will take to reach saturation. In the case of oil, you would simply increase the production volume.
The stock of cocoa plants takes years to recover. Cocoa is mainly grown in Central Africa and Indonesia. However, stocks are declining due to natural disasters and high fertilizer prices.
However, the cocoa supply is expected to shift to Latin America in 2027/2028. So no remedy in the short term.

Cocoa is traded in USD. If a strong dollar is expected as a result of Trump's tariff policy, there is no improvement in sight here either.

Indicators for the price development of a commodity are the futures contracts on the markets.

However, I cannot understand to what extent the price has shot up due to speculators. And then I'll stay on the sidelines for the time being. But I will try to understand the subject of commodities better.

•

Epi@Epi

7Mon

I didn't have cocoa on my radar yet, only coffee $COFU

It looks similar there.

•

Maximilian@Max095

6Mon

Very interesting topic!

•