2023-11-19 06:13:03
With the return of the El Niño weather phenomenon, harvest prospects are poor and prices are soaring on the markets.
How much further will their prices rise? The prices of cocoa, sugar and orange juice have continued to soar since the start of the year. A tonne of sugar is currently selling for more than 55 euros on the New York futures market. An amount that has not been reached since 2011. Cocoa is priced at more than 3.60 euros per kilo, up 55% since January. As for orange juice, a kilo of concentrate is now trading at more than 8 euros, double its price at the beginning of January.
This boom is mainly explained by the poor climatic conditions which have hit agricultural production in several regions of the world. The El Niño meteorological phenomenon is being blamed, explain The echoes et Le Figaro. At each of its passages, every two to seven years, this climatic phenomenon is associated with an acceleration of global warming caused by human activities as well as an increase in extreme events. Back this year, it should last until next spring. But he is already being held responsible for the deterioration of harvest prospects.
Cocoa producers facing a crisis situation
The key ingredient in chocolate making reached new heights this week. Its price rose to 3.73 euros at the close of the markets on Wednesday November 15. Such a level had not been reached since 1978, forty-five years ago, notes Le Figaro.
This outbreak can be explained by the difficulties of producing countries. The harvests are indeed expected to be poor in Ivory Coast and Ghana. These two African countries represent respectively 44% and 14% of world production. Too dry weather initially hampered the development of young cocoa tree shoots. Then, heavy rains led to the development of diseases in the crops. As a result, the current quarter’s harvest might be nearly 30% lower than last year, according to an analyst from the German bank Commerzbank, interviewed by Le Figaro. The markets, for their part, fear an insufficient supply.
Sugar becoming more and more expensive
The price of sugar has jumped since the start of the year. The ingredient went from 40 euros per tonne at the beginning of January to more than 55 euros today, a boom of more than 37%.
Here once more, this increase is explained by poor climatic conditions. Heat waves have penalized sugar cane production in India and Thailand, the two largest exporters following Brazil, The echoes. Bad harvests risk penalizing sugar production in 2023, but also in 2024. This crisis situation is also aggravated by the jump in fuel costs, which encourages cane crushers to produce ethanol, more profitable than raw sugar, also recalls Le Figaro.
The rise in sugar prices is already having consequences in the shopping basket. At the end of October, the consumer defense association UFC Que Choisir noted an increase of 21% in one year in the price of candy. And this increase is expected to continue in 2024. Dirk Van de Put, CEO of the Mondelez group, which notably manufactures Oreo biscuits and Toblerone chocolates, has announced price increases on its products next year.
The price of orange juice breaks historic records
Frozen orange juice concentrate is reaching levels never seen before. A kilo of orange juice traded up to 8.47 euros before falling to 7.80 euros on the day of October 31. This is a record since the beginning of futures contracts on the New York market in 1966, noted the agency Archyde.com.
This surge in prices can be explained above all by the collapse of orange production in Florida, explain The echoes. This American state is bearing the brunt of the ravages of hurricanes and the consequences of the so-called “yellow dragon” disease. The sector was particularly affected by the passage of storm Ian in September 2022: 90% of Florida’s plantations were in its path. A large part of production now relies on Brazil. But the country cannot fulfill all orders. A reversal of the current shortage situation will take time and is not certain to happen, warned Ibiapaba Netto, executive director of CitrusBR, the association representing Brazilian juice producers.
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