COFFEE SPECULATORS Coffee has not been an exception. Prices rose from about US¢/lb 140 in Oct 2023 to about US¢/lb 240 in Aug 2024. Vietnam and then Brazil had prolonged droughts that affected the prospect of their 2024 and 2025 crops. Once again, speculators came to buy coffee and caused prices to soar beyond what many could pay their margin calls for. Coffee prices reached US¢/lb 440 by mid-Feb 2025 and then retreated down to about US¢/lb 380.
So, a combination of bad weather in major producing countries like Brazil for FCOJ and coffee, Vietnam for coffee, and West Africa for cocoa, plus the desire to invest in what is perceived as a “tighter S&D” elevated prices to “new frontiers”! One may say that if the macro environment was stable and trade wars were not in sight, these commodities would not have had the price setbacks that they did. Well, we will never know now, but one has to be “alert” because the past tends to repeat itself, eventually!
COUNTRIES LIKE BRAZIL, AN AGRI SUPER POWER WILL LIKELY BENEFIT FROM ANY SHORT- TERM “RETALIATION” FROM CHINA, SO IT SEEMS.
COCA PRICES RALLY Cocoa prices rallied from about US$ 2,700 per metric ton in April 2023 to US$ 4,000 by Jan 2024 and then shot up to almost US$ 13,000 by mid-Dec 2024. Crop problems in West Africa triggered a speculative buying frenzy, which caused trade short covering and producers delaying deliveries. After prices peaked in Dec 2024, the market started a gentle retreat to about US$ 11,000 by the end of Jan 2025 and then dropped to US$ 8,200 in the past few days.
SUGAR DROP When it comes to sugar, the supply side had its challenges also. The current April/ March 2024/2025 S&D is showing a meagre 801k metric ton surplus and the 2025/2026 is showing a 2.2 million metric ton deficit. The cane in the Centre-South of Brazil also suffered from drought and fires in 2024. The Centre-South Cane Agri yields dropped about 10.5% and despite the acreage increasing by 4.29%, the total 2024/2025 cane crop dropped to about 615 million metric tons from 653 million metric tons the year before. At this stage, the 2025/2026 Brazil CS cane crop is estimated to be from 600 to 625 million metric tons, so not a major increase.
As India stopped exporting its own sugars in 2023 (still tolling, i.e., importing Raws and exporting Refined) and Thailand had a lower cane crop in 2024, Brazil became even more important. Australia had a disappointing cane crop also and lost about 200k metric tons of exportable sugars in 2024/2025. Brazil exported close to 58% of the 65 million metric tons of sugar that moved from A exporting to B importing nations in 2024 i.e. from Exporting to Importing Nations. .
As we go into 2025, with lower sugar stocks at origins and a similar need to import, i.e., 65 million metric tons (23 million metric tons refined/white sugars and 42 million metric tons of raw sugars), any issues at origins could cause some hiccups! Coming back to Brazil, the weather has been OK so far and the cane is expected to improve somewhat, but it won’t be great. Brazil, which started Jan 2024 with 5.7 million metric tons of extra stocks, just started 2025 with 3 million metric tons less than Jan 2024, so no “fat” to burn!
Of course, Brazil is not the only sugar exporter and many other nations contributed to the 42% exported in 2024, but it is a combination of many that made the volume. Thailand is having a better crop and will have some 1.4 million metric tons extra exports. India allowed for 1 million metric tons of its own sugars to be exported recently. Central America and Colombia will have similar crops. Mexico may have a bit more to export to the USA and some to the world market, but it won’t be much more!
SUGARBEET We need to see how the EU, UK, Russia, Ukraine, and the rest of the CIS beet crops will develop once planted, around March/April time. The EU, Ukraine, and Russia exported more in 2024, but at best may repeat the dose in 2025. Pakistan exported some of their “extra” sugar stocks in 2024, but the current crop is not great and the government is already considering whether to import some raw sugars to cool down the “very hot” domestic market.
So, as we stand, 2025 will be challenging in terms of lower sugar stocks and large producers will need to do well as demand will be similar. The latest CFTC report (4th of March) put funds and specs NET short 4 million metric tons, while the fund gross short stood at 7.9 million metric tons. The world sugar trade is close to 65 million metric tons..
Alberto Peixoto E: albertopeixoto@apcommodities. london T: +44(0) 7570 714 981
35 | ADMISI - The Ghost In The Machine | Q1 Edition 2025
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