Huge increase in sugar, cocoa and coffee prices!

The recent downward trend in the commodity market continued last week, influenced by uncertainties regarding the timing of the interest rate cut by the US Federal Reserve (Fed) and concerns about the manufacturing industry in the US. However, supply constraints and production risks for certain products caused prices to rise. In particular, coffee, cocoa and sugar prices showed significant increases.

DROUGHT IN VIETNAM INCREASES COFFEE PRICES

Drought concerns in Vietnam caused an increase in global coffee prices. In Vietnam, the world’s second largest coffee producer, the expectation that production will decrease due to drought has increased supply concerns in the markets. This situation caused coffee prices to rise rapidly. Experts state that if the drought continues, the increase in coffee prices may continue.

RISK OF PRODUCTION DEFICIT IN SUGAR

Prices are also rising in the sugar market. The International Sugar Organization (ISO) estimates that there will be a production deficit of 689 thousand tons in the 2023/24 period. This expectation of a production deficit led to an increase in sugar prices. The possible deficit in sugar production may become even more evident as large producers, especially Brazil and India, produce less sugar due to climatic conditions.

COCOA SUPPLY IS SHAKING IN IVORY COAST

Restrictions on cocoa sales in Ivory Coast have increased fears that supply will tighten further. Ivory Coast cocoa regulator Le Conseil du Cafe-Cacao has informed companies and exporters without facilities in the country that they will not be able to purchase cocoa beans until at least the end of this month. This restriction caused a contraction in cocoa supply and a corresponding increase in prices. These difficulties in the cocoa market may also be reflected in the prices of chocolate and other cocoa products.