Cocoa prices are climbing. El Niño is f*cking with West African crops. The companies that turn beans into candy bars have no plan.
This is apparently different from the last time cocoa prices climbed. Or the time before that. The difference, according to people who get paid to notice these things, is that chocolate makers can't just pass costs along anymore. They already jacked prices up. Consumers already hate them. There's nowhere left to hide.
West Africa grows most of the world's cocoa. Weather patterns affect crop yields. This information has been available since approximately the invention of agriculture. Yet here we are, treating it like breaking news.
The big chocolate companies spent decades building supply chains designed to extract maximum profit from cocoa farmers while maintaining zero buffer for actual disruptions. Brilliant work. Really forward-thinking. Now El Niño shows up like it does every few years and suddenly everyone's scrambling like this is a black swan event instead of a thing that happens on a schedule meteorologists can predict.
Retail traders are already searching "cocoa futures" and watching YouTube videos with thumbnails of guys pointing at charts. They're learning about West African weather patterns for the first time. They're discovering that chocolate comes from a plant. They're about to lose money in a commodity market they didn't know existed until this morning.
The technical analysis here is simple. Cocoa go up. Chocolate companies f*cked. Weather exists. Nobody planned for weather existing. Classic.
But sure, this time is different. Just like how this time your nephew's trading strategy is finally going to work, and this time you'll actually read the 10-K before buying the stock, and this time the weather won't affect the crops that grow outside.
Photo by Etty Fidele on Unsplash
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