“We don’t expect major supply increases, while demand could slowdown especially in lower-income segments of the population that cannot afford such high prices,” said Marcos Fava Neves, a researcher at University of Sao Paulo. That led futures to rally to a 56-year record, with little relief in sight. That combined with shrinking stockpiles in Vietnam, the largest-robusta producer, is likely to keep prices elevated.īut among breakfast items, orange juice has probably seen the highest price increase following a staggering supply shortage caused by disease and hurricane damage in US top producing state Florida. Robusta bean production is expected to fall by 5% in Brazil, while in Indonesia, the world’s second-biggest robusta exporter, output is projected to drop by 20%. “Consumers will start to see the cost of bread and pasta falling as the prices of grains have come down, but the last thing to fall will be your sugar and coffee and sweets,” said Kona Haque, head of research at ED&F Man. Prices of soft commodities have been outperformers this year, surging about 24% while the broader agriculture index eased 3% weighed by falling wheat and corn prices. This week, robusta prices surged to the highest level since at least 2008, making it more expensive for buyers around the world to get a cheap brew. It’s one corner of the commodities market, along with gold, bucking the deflationary trend even as the cost of food staples like bread and pasta eases. And in Germany, chocolate and biscuit makers complain of soaring sugar and cocoa costs. In Japan, one beverage giant suspended the sale of Tropicana orange juice because of a shortage. In the UK, retailers are locking instant coffee jars in security cases to prevent theft. The return of El Niño and prospects of hotter, drier weather in producing countries is now threatening to exacerbate tight supply. Prices of soft commodities have soared this year because of supply constraints. Think coffee, chocolates and your favorite snacks. Goldman’s Low US Recession Odds Get It Wrong, Bond Investors Say
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Jeff Bezos Has Gained $10 on Mystery Purchase of One Amazon Share Oil Traders Are Daring to Defy Market Kingpin Saudi ArabiaĪs Fed Signals Rate Pause, Powell Will Have to Placate Hawks (Bloomberg) - There’s an aisle of the grocery store where inflation is looking exceptionally sticky: indulgent treats.
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