In every sustained commodity price rally, there is a moment when fundamentals – supply, demand, inventories – no longer matter. The cost of the molecules, whether in the form of energy or foodstuffs or metals, stops being a price and becomes just a number. The market ceases to be orderly and becomes unruly.
It is clear that moment has arrived for cocoa. Cocoa futures in New York recently closed at US$9,649 (S$13,000) a tonne, gaining nearly 8 per cent. In dollar terms, they surged more than US$700 on the day – equal to the trading range that, in the past, would have taken a year to witness.
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