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Commodity and Currency




As per last month's report, the cocoa market stayed fairly stable during the month, fluctuating within a range. All fundamentals are very upbeat and the Ivorian Election – which usually creates civil and political unrest which de-stabilises the market – seems so far to have passed off peacefully.

The new crop year is well underway and forecasts of harvest sizes in the major cocoa growing areas are optimistic and very bullish. So it's a question of ‘watch this space'..



Dairy prices have stabilised, however we expect them to stay at current (high) levels through until the spring.

Sugar supply is much more critical, with world prices above the EU support price. This means that supply within the EU is very short going forward and the Refiners have the whip hand. Various factors have caused this, but the end result is that Tate & Lyle have no free availability for 2011 unless contracted. (We are).
So sugar prices are expected to rise by as much as £80 per tonne going forward. As far as unrefined sugars and Organic is concerned, we expect there to be an increase, but likely to be more like in the region of £40 per tonne

The widely publicised shortages in cereal harvests across Europe & Russia are leading to significant increases in the Starch and Glucose Industry. Due to a really poor potato harvest in Northern Europe, Potato starch is in very short supply which has dragged native Wheat Starches along with prices doubling against last year. The Glucose Industry in Europe is almost exclusively based on Wheat, and the producers are warning of shortages and will only contract forward for 6 months. The Glucose price increase is around £85-100 per tonne and this also impacts on Fondant and other glucose containing products.





Following the decline in Sterling against the Euro during September, the trend continued to mid October, dropping below Euro1.11 = £1. However following better than predicted UK economic news, Sterling bounced back to the 1.14-1.15 level. Obviously economic recovery is a fragile and sensitive subject and media and pundit opinion can really impact heavily on the exchange rate – with the cuts around the corner, the next few months will be potentially difficult and testing for all.

Tony Mycock – 3.11.10


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HB Ingredients
Cocoa House, 15, The Cliffe Industrial Estate, Lewes, East Sussex. BN8 6JL.
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Enquiries:+44(0)845 88 00 799 Fax:+44(0)845 88 00 833