Cocoa is a treat, with prices that high demand should plummet.
By construction the future will "collapse" to the cash price at expiration (modulo carry costs) meaning that the future is exactly representing the market consensus on future price.
This is no different than a stock market where a stock's theoretical price is the consensus on discounted future cash flows of the company. If a stock had an expiration date then it would have to collapse to the "cash price" (e.g. the exact discounted cash flow) at expiration otherwise funny arbitrage things happen.
May 2024 futures are also up almost the same amount.[0] You can call that betting on the future but it's a big stretch. It's obvious that it is largely reflecting the current market price.
[0] https://www.barchart.com/futures/quotes/CCH24 (takes some time to load)
This is entirely due to the limit mechanism that tries to keep prices approximately in line with supply and demand. There have been several instances of grains in particular locking limit up during a blight over and over again. In recent history oil going negative is another example. If it wasn't for the limit mechanism (and in some cases, the literal government) stepping in they absolutely could 100x. When you're a goods supplier you'll pay nearly anything once prices reach your "uncle" level. The dynamics at limit are somewhat interesting as it's a case where the entirely market has consensus that "I need to buy (sell) now or I'm hosed".
I wasn't suggesting you were saying you couldn't speculate on commodities. I was mostly suggesting that even removing traders the "speculation" occurring is due to the anticipated future value of that commodity. If it wasn't, then buyers and sellers would go to the cash market which while extremely volatile may also be a smart choice for at least some of the crop.
IMO limit mechanisms are not nearly aggressive enough and I've been caught in a few of them myself. One of the few rare nightmare scenarios for a commodity trader. But making limits more aggressive would imply some form of price control which also would not be great.
But my point is I believe the prices changes are driven by speculation, and not caused by supply fundamentals.
>Cocoa futures ended Thursday at $5,635 a metric ton, shooting past the old record of $5,368, which was set in July 1977. Bad growing weather in West Africa is to blame this time as well as then.
>Hot and dry weather in Ghana and the Ivory Coast bedeviled growers in the region last year and threaten the cocoa crop again this year, said Jack Scoville, futures-market analyst at Price Future Group.[0]
[0] https://www.wsj.com/livecoverage/stock-market-today-dow-jone...
Cocoa is very elastic, so an 11% reduction in crop should not lead to a 300% increase in prices. The normal thing instead would for people to eat less chocolate until there is enough supply, with only minimal change in prices.
Instead there's something weird going on - tell me, would you buy a chocolate snack that costs 3 times as much as last year? Or would you buy a different snack instead?
>The normal thing instead would for people to eat less chocolate until there is enough supply
The cost of cocoa is not identical to the cost of chocolate.
>Based on a 200g milk chocolate bar costing €2, cocoa comprises around 10 percent of total costs; sugar 1 percent; milk products 6 percent; production, packaging and marketing and profits around 78 percent and tax 6 percent. [1]
This means a 3x increase in prices would make the bar cost €2.60. There are also products that use only small amounts of chocolate, reducing the total increase even further. For example the increase in chocolate costs in a chocolate chip cookie is negligible.