The Cocoa Short Squeeze: Why Cocoa is Trading like Meme Stock
00:00:00.000 | This is the big news in the commodity markets right now is
00:00:02.180 | this parabolic spike in cocoa prices. Cocoa is moved in price
00:00:05.520 | from about 2000 bucks a ton, which is where it normally
00:00:08.060 | trades at to $10,000 a ton. So here's all the cocoa production
00:00:11.720 | 73% of its in Africa, mostly in Ghana and Ivory Coast cocoa is
00:00:15.920 | grown from the cacao tree when you eat a Hershey's bar, for
00:00:18.680 | example, 11% of that bar is ground up cocoa powder. So in
00:00:22.240 | Q4 of last year, El Nino spiked like crazy. And that caused a
00:00:26.600 | lot of rainfall to hit the west coast of Africa. And as a
00:00:29.800 | result, this fungus was spread in cocoa trees, there's a fungus
00:00:33.120 | called black pod disease. So now if you look at the cocoa
00:00:35.760 | production out of Ghana, you can see that we've seen a 50% rough
00:00:38.760 | decline in cocoa production. So when that happened, everyone
00:00:42.000 | started to corner in the market, and then all the short sellers
00:00:44.480 | got squeezed and it causes big parabolic jump in price chocolate
00:00:47.520 | companies, they're talking about cutting the size of their
00:00:49.620 | chocolate bars, raising prices and starting to use other
00:00:52.360 | ingredients. So you'll start to see that happen in the shelves
00:00:54.760 | in the next couple of months.