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Commodity and Currency




The impasse in the Ivory Coast continues, and this has resulted in the Cocoa Market increasing by around 10% back to the levels seen last summer. The newly elected president is still prevented from taking over from the previous incumbent, civil unrest and uncertainty has disrupted the flow of cocoa, in some areas it is reported that cocoa farmers have fled to neighbouring countries. All in all a messy situation to say the least. However on a global basis and assuming a solution is found, the overall cocoa crop outlook for 2010-2011 is positive with a recent authoritative report forecasting a small surplus of around 145k tonnes. This, in normal times, would be a huge bearish factor that would keep prices low.

However the press cannot resist a bit of scandal making, such as this report:-

Cocoa Powder is still very short and prices very high. Supply should ease slightly in the second half of the year, but we are not exactly holding our breath.



Dairy prices are very firm still and expected to stay that way for the coming couple of months until the European spring grass hopefully boosts production. It is still crazy that the supermarkets are largely importing fresh milk from the continent and selling at levels that are uneconomic for UK farmers to be viable. Again an example of supermarket food being too cheap!

The Sugar supply situation is now quite critical, with very limited availability. With the world price still exceeding EU prices, the upward pressure on prices is irresistible and availability is really an issue. We have stock and contract cover albeit at higher prices.. The December flooding in Queensland wiped out more of the cane sugar crop and also wet and snowy weather in Europe has caused Beet harvesting to be delayed and sugar levels to drop, as well as beet rotting and having to be dumped.


Sterling has had a volatile time against the Euro since the beginning of the year. The UK economic situation is behind where pundits expected us to be the bad weather prior to Christmas had a negative impact on all commerce. We certainly lost a chunk of sales due to our customers having reduced sales due to their customers being unable to shop online sales lead times being stagnated due to delivery issues. This has negatively impacted on a wide range of businesses from Tesco down and unfortunately these sales are effectively lost forever. Anyway, onward and upward, 2011 has been slow starting as companies de-stock, but we hope that normality will return soon.

It does look like 2011 will be a fairly bleak year with the cuts in public spending being rolled out as the deficit is tackled, and inflation inevitably rising as peoples' standard of living reduces let us hope that Chocolate and associated products remain fairly recession proof!

Tony Mycock 4.2.11



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