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Cocoa

COCOA

The see-saw effect saw another reversal during July – this time the market reverted to levels below 1900 by the end of the month. Largely this was due to positive information emerging about the Cocoa crop surplus for the current 2010-2011 year. Estimates now put this at c.200,000tonnes. Also some pundits are predicting that the Cocoa Crop from the coming 2011-2012 year will also be a bumper one. Quite honestly I think this is very premature and speculative, although a lot of this is based on the fact that Cocoa – at recent and current prices, is a much more viable and desirable product for farmers to invest in. This investment is generally by way of fertilisers, general husbandry – pruning, clearing undergrowth etc etc, as well as replanting and replacing old and damaged trees – so with no question the outlook is more positive than negative.

We (famous last words) do predict that the cocoa market will range from 1700 – 1950 going forward.

On Cocoa Powder, prices are still very firm, although Conventional powders are expected to see easing prices into 2012. Organic & Fair Trade powders are still at a premium and prices do not seem to look to be any weaker than they currently are.
Francisco Redruello, senior foods analyst at Euromonitor International, comments:- “It is true that cocoa butter prices have been flat in the last three months but cocoa powder, extensively used in the whole drink and ice cream industries, has maintained very high price ratios, driven by strong demand in Asian economies. While some further decline in cocoa prices is likely to take place in the coming weeks, I do not foresee any dramatic acceleration in trend before September,”

 

SUGAR

In terms of sugar, prices remain very firm - last year's drought and low yields from sugar cane plantations in Brazil has pushed prices up and a lot of refiners have been holding back from contract negotiations. This in turn has also pushed Organic sugar prices up substantially as previously reported. Also China is predicted to need to import around 3 million tonnes this coming year, although reports of Indias' sugar harvest is looking very positive and could result in c.1.5 to 2 million tonnes for export – so watch this space!

 

Currency

 

July also saw a reversal from June, with Sterling improving steadily during July to top €1.15 = £1.
Definitely an ‘about time too' moment, but given that as I write this, world stock markets have plunged and apparently the end is nigh economically around the planet!

Whatever happens, we cannot change anything and after it all calms down, hopefully someone somewhere will still want our products! We still have to eat, don't we??

Tony Mycock
5 th August 2011

   
         
     
     
   

HB Ingredients
Cocoa House, 15, The Cliffe Industrial Estate, Lewes, East Sussex. BN8 6JL.
Sales order hot-line:+44(0)844 32 44 499
Enquiries:+44(0)845 88 00 799 Fax:+44(0)845 88 00 833