Cocoa Bean Terminal Prices
With the average spot ICE London cocoa futures price reaching £8,950/mt (€10,694/mt) in January 2025, the price leapt up by a staggering 144.5% y-o-y and made cocoa prices the highest-performing agricultural commodity of 2024. Cocoa product ratios also firmed throughout much of the year on tight availability as buyers scrambled to cover firm consumer demand, leaving many buyers caught out and having to cover at the top of the market. For reference, the Expana Benchmark Prices (EBP) for Cocoa Butter Spot EXW Europe set a record in December 2024 of €40,268/mt, surpassing the previous high set in April 2024, as a combination of record bean futures and firm ratios combined.
Fundamentally, the increase in 2024 was precipitated by deteriorating weather conditions and disease spreading through the key growing regions in west Africa. According to the ICCO, the 2023/24 crop year – which runs from October to September – was some 13% smaller than the previous year and marked the smallest year of global production since the 2015/16 crop. 2023/24 was also the third consecutive year of deficit, compounding the tight global supply situation. Adding to the bullish momentum was strong consumer demand, particularly in the first half of 2024, as evidenced by continually firm grindings figures in nearly all areas, which only started to dip in Europe in Q3 2024. Based on recent surveys, several market participants have told Expana that they expect a recovery of the current 2024/25 crop to relieve some of the high prices, but estimates of a surplus as much as 200,000 tonnes could be optimistic based on the assumption that consumer demand will continue to erode grindings figures towards a 10% year-on-year decline, whereas some skepticism has been expressed in January that the surplus could be closer to zero if the current dry conditions in key growing regions impact the midcrop output.
Sugar Terminal Prices
The sugar price in western Europe decreased by 30.9% y-o-y to €517.50/mt in January 2025, though ticked modestly higher by 3.2% m-o-m. The irregular weather patterns observed throughout 2024 (above-normal rainfall in some parts of the EU and late-summer dry spells in other regions) have negatively affected sugar beet development, as illustrated by large sugar beet producers flagging the risk of lower-than-expected sucrose content. Additionally, the EU has increased exports to the world market in a bid to balance domestic supply.
As a result, sugar prices in the EU27+UK experienced moderate gains in January. This was also supported by a rally in world sugar prices due to speculators and hedge funds rolling to the forwards and/or closing their material net short position of both the ICE #11 and #5 sugar futures.
Looking ahead, on the back of decreasing sugar beet prices, EU farmers have already signaled their intention to reduce total acreage. In response, sugar producers are revising down their volume of beet deliveries for the next crop year.
Skimmed Milk Powder (SMP)
The Expana Benchmark Prices (EBP) for EU SMP averaged €2,535/mt in January 2025, representing an increase of 3.5% y-o-y, and a 2.4% increase m-o-m. Supply across the EU has been reported as growing during late Q4 2024 and early Q1 2025, with ample output to meet mixed spot demand. Throughout December and January, domestic buying interest was sluggish, as market sources across the EU indicated that most requirements were already covered by contracted consignments, thereby reducing spot market activity. Due to high cocoa prices, chocolate manufacturers lowered their production, while aiming to ensure supply security, reducing the demand for SMP. Due to elevated price levels throughout Q4, buyers across the EU avoided larger contracts and covered volumes required through a hand-to-mouth approach with smaller spot contracts. Consequently, the price impact of SMP on chocolate prices over the Valentine’s period will be highly dependent on the time of purchase, as well as the length and volume of the contract.
International demand was reported as steady during late Q4 and early Q1. While the outbreak of foot-and-mouth disease on January 10, 2025, in Germany added uncertainty to the EU dairy market, it had a limited impact on the EU SMP market. EU market participants are still facing severe restrictions on exports of German SMP outside of the EU, but German SMP can still be moved within the EU. However, other EU origins were able to balance out the reduced German exports.
Vanilla Prices
The EBP of Madagascan vanilla, which is typically used as flavoring in chocolate, fell by 12.5% y-o-y to $70/kg (€69/kg) in January 2025 for gourmet vanilla (fob Madagascar). Following a large 2023 vanilla crop in Madagascar, estimated at 3,000 metric tons, and a significant inventory build-up in Madagascar and destination markets, the vanilla oversupply continues to cause bearish undertones. Flowering for the new campaign has been abundant and signs for the 2025 harvest are so far encouraging. Stronger flowering was anticipated after a smaller crop in the current campaign.
Strawberry Prices
The price for Spanish strawberries increased by 51.1% y-o-y to €7.03/kg in January 2025 but represents a 29.0% m-o-m decline. The strawberry season in Huelva began in November with limited quantities. Supply is steadily increasing and is expected to reach significant levels by late January. Market players attribute higher strawberry prices to a tight supply and increased production costs. The industry is also facing challenges such as water shortages and labor constraints. Demand for strawberries has been described as strong by market sources.
Additionally, European customs' strict quality controls are reportedly reducing fresh strawberry imports from Egypt and Morocco. While some importers have found the quality from these countries satisfactory so far, many retailers are favoring Spanish strawberries for their consistent superior quality. Market sources anticipate a rise in demand throughout February, especially with the approach of Valentine's Day, as consumer interest in the EU typically accelerates during this period.
