Cocoa and coffee were the best-performing commodities of 2024, driven by global supply deficits.
Meanwhile, coal emerged as the year’s worst performer due to sluggish growth in China while precious metals remain buoyed by their safe-haven appeal and a strong US dollar.
Looking ahead, analysts are tipping that 2025 will be marked by heightened global trade tensions as Donald Trump returns to the US presidency, threatening hefty tariffs.
Cocoa & coffee surge
Cocoa prices surged nearly threefold last year, reaching a record US$12,931 per metric ton in New York, as supply constraints persisted in West Africa, the world’s largest cocoa-producing region.
“The softs sector, led by cocoa and coffee, has been the main winner amid adverse weather in key growing regions,” said Saxo Bank head of commodity strategy Ole Hansen.
Ivory Coast and Ghana, accounting for more than 60% of global cocoa production, faced significant crop losses due to dry weather, smuggling, bean diseases and a shift towards illegal gold mining.
As for coffee, Arabica coffee prices hit a 40-year high after severe drought conditions in Brazil, the world’s top coffee producer, sparked fears of reduced supply.
China struggles weigh coal, oil
In contrast, China’s economic struggles weighed heavily on crude oil and bulk metals.
Steel-making coal was the hardest hit, reflecting reduced industrial demand from China’s ailing property sector.
Brent and West Texas Intermediate crude prices declined for the second consecutive year in 2024, with analysts predicting further pressure in 2025 as supply outpaces demand growth. OPEC’s spare capacity climbed to 5 million barrels per day, underscoring weak demand.
Analysts suggest that geopolitical factors, including Trump’s policies on Iran and Russia, could still alter the supply landscape for key commodities in 2025.