MacroVoices #432 Jeff Currie: Metals, Energy, Commodity Super Cycle & More
Macro Voices
Long Journey to Rebuild Tree Commodity Supply Base
Coffee and cocoa, as tree commodities, are facing challenges due to climate change impacting the equator regions. The prolonged time trees take to grow poses difficulties in rebuilding supply. The COVID-19 pandemic caused a significant drop in chocolate demand due to airport closures, exacerbating the supply chain issues. The slow replenishment process makes the recovery of tree-based commodities like coffee and cocoa into a long journey, leading to significant price volatility and potential equilibrium shifts. The current scenario suggests that a commodity supercycle, particularly in soft commodities, could be on the horizon due to factors like CAPEX dynamics and historical correlations with metals prices.
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