Cocoa Bean Terminal Prices
With the average spot ICE New York cocoa futures price reaching $11,108/metric ton (mt) ($5.04/lb) in January 2025, the price leapt up by a staggering 150.2% y-o-y and made cocoa prices the highest-performing agricultural commodity of 2024. With cocoa bean prices soaring, 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. The Expana Benchmark Prices (EBP) for Cocoa Butter Spot EXW Europe set a record in December 2024 of €40,268/mt ($19.19/lb), 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 International Cocoa Organization (ICCO), the 2023/24 crop year – which runs from October to September – was about 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. However, estimates of a 200,000 mt surplus could be optimistic, based on the assumption that consumer demand will continue to erode grindings figures towards a 10% y-o-y decline. Other estimates expressed in January suggested that the surplus could be closer to zero if the current dry conditions in key growing regions impact the midcrop output.
Sugar Prices
In the US, the spot and contract prices of beet and cane sugar are lower than year-ago levels. The EBP for beet sugar spot Midwest US was last assessed at $0.46/lb, a 20% decline y-o-y. Cane sugar spot Southeast prices also decreased over the same period, assessed at $0.63/lb at the end of January, reflecting a 13% decrease y-o-y. Contract prices for beet and cane sugar declined by 20% and 14% over the same period, respectively.
Market participants note that the soft tone can be attributed to slow deliveries amid ample beet sugar supplies and over-commitment by buyers in 2023 that trickled into 2024. Some market participants have indicated that demand has been down throughout the year for food manufacturers, but retail demand has been steady. Some supply uncertainty remains, and the futures market has strengthened throughout the year due to lower production in India, the world’s second largest sugar producer.
According to the US Department of Agriculture (USDA), US sugar supply for 2024/25 increased to 14.94 million short tons raw value on the back of increases in beet sugar production, imports and beginning stocks. Beet sugar production also increased to 5.33 million short tons raw value, mainly on rising beet sugar recovery from sliced sugar beets of about 15% from last month.
Participants also indicated that sales during Q4 2024 fell below expectations, specifically during the last few weeks of December when Valentine’s Day preparations were in full swing. However, market players state that consumer demand at retail remains strong as the holiday approaches.
Nonfat Dried Milk
The EBP of US Nonfat Dried Milk increased by 13% y-o-y in January 2025 to $1.38/lb.
Nonfat dried milk prices began rising in April 2024 with production levels dropping 10% y-o-y from January to November 2024 while domestic demand remained consistent. Higher US prices have pushed away most of the international demand throughout the back half of 2024 and into 2025, with exports dropping 7% m-o-m in November 2024. There is concern among industry sources that exports to Mexico (the biggest importers of US nonfat dried milk) could decrease further if potential tariffs are realized under the Trump Administration. Market players indicate the market is softening in January 2025 and is expected to continue to do so as an anticipated uptick in milk production in March 2025 could boost production and increase availability.
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 ($32.66/lb) in January 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 provide the market with 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 EBP for US strawberries declined by 28% y-o-y and 31% m-o-m to $2.86/lb in January 2025, largely due to the Mexican strawberry market softening as of January 6, 2025, because of increased supplies, which led to a situation where supply exceeds demand. Expana market participants expect this trend to continue, with falling prices anticipated by many. In 2024, Mexico's berry production experienced an 8% y-o-y growth, driven by technological innovations and the cultivation of drought-resistant crops.
As of early January 2025, Florida's strawberry growers are facing several challenges affecting the current season. Cooler weather conditions have led to limited shipments, with forecasts predicting continued low temperatures. These conditions are expected to result in smaller fruit sizes and some green tips, though gradual improvements in quality are anticipated. To mitigate some of these challenges, Florida growers have adopted new strawberry varieties. The Florida strawberry season remains active, with harvesting typically continuing through to April or May. Florida contributes about 13% of the nation's strawberry production, underscoring its significant role in the US market.
