In every prolonged commodity price surge, there comes a point where the underlying fundamentals – encompassing supply, demand, and inventories – lose their significance. The price of these essential molecules, whether in the form of energy, foodstuffs, or metals, transitions from being a reflection of value to merely a numerical figure. The market transforms from orderly to disorderly, becoming increasingly unpredictable.
It’s evident that such a moment has arrived for cocoa. Recently, cocoa futures in New York closed at US$9,649 (S$13,000) per tonne, marking a nearly 8% increase. In dollar terms, this surge amounted to over US$700 in a single day – a trading range previously witnessed over the course of a year.
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