Why this commodity has outperformed Nvidia this year
Cocoa (CC=F) prices hit record highs this week, breaking the 10,000 level for the first time. Blue Line Futures Chief Market Strategist Phillip Streible joins Yahoo Finance Live to discuss the factors behind the surge. Streible attributes the rise in cocoa prices to recovering demand following the COVID-19 pandemic and geopolitical tensions like the Russia-Ukraine conflict, which caused prices to "spiral out of control." According to Streible, the price increases of cocoa are "a combination of things that won't get resolved anytime soon." With demand at an all-time high, a weak crop yield, and speculation in the market, cocoa's cost will continue to surge and weaken the chocolate sector, as companies look for ways to combat the price increases. Streible suggests that with cocoa prices surging, producers need to explore other avenues where they can save, such as labor costs or even milk prices. However, he notes that this approach could also turn into a "robbing Peter to pay Paul" scenario, which would be detrimental for companies if cocoa prices continue to rise and "squeeze profitability." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Angel Smith
