THE IMPLICATIONS EXTEND THROUGHOUT THE VEGETABLE OIL MARKET
Stronger soybean oil supports palm oil, canola and rapeseed, while Europe's oilseed balance is tightening because of reduced crop forecasts and strong crushing demand. EU rapeseed production is now projected at 20.0 million metric tonnes and sunflower seed output at 9.5 million tonnes, following drought damage across several producing regions and disruption to Black Sea trade.
Coffee and cocoa have provided further evidence of how quickly physical market developments can alter sentiment. Arabica coffee initially weakened after Brazil revised preliminary August export data sharply higher, correcting a technical problem that had omitted a significant volume of certificates. The revision added 1.23 million 60-kg bags, equivalent to 73,800 metric tonnes, to reported exports.
However, the physical market remains tight, with ICE- certified Arabica inventories falling to a 26-year low. The contrast between stronger Brazilian shipments and declining exchange inventories is likely to remain a source of volatility.
Cocoa prices, meanwhile, recorded particularly strong gains as attention returned to West Africa. Ivory Coast is expected to maintain its producer price at 1,200 CFA francs per kilogram, equivalent to approximately US$2,140 per metric tonne. The relatively low farmgate price compared with international futures raises concerns about producer incentives and cross-border smuggling into neighbouring countries.
Cotton has also strengthened sharply, reaching its highest levels in more than two years before modest profit-taking emerged. Weather concerns in Texas and India have increased fears of tighter global supplies, reinforcing a broader pattern visible across agricultural markets.
AS SEPTEMBER BEGINS, THE CENTRAL THEME IS THEREFORE ONE OF INTERCONNECTED VULNERABILITY
Sugar provides the clearest example: Brazilian rainfall, ethanol economics, India's monsoon and Thailand's recovery from drought are simultaneously influencing the global balance. Similar connections are emerging across grains, oilseeds and soft commodities.
The coming months will determine whether these risks translate into genuine supply shortages or remain primarily embedded as risk premiums in futures markets. For sugar, the focus will remain on Brazil's final crushing performance, Indian cane development and Thailand's late-monsoon conditions. For grains, attention will centre on the Black Sea and future Ukrainian planting. Oilseeds will depend increasingly on biofuel policy and weather, while coffee and cocoa remain sensitive to physical inventories and producer incentives.
Agricultural markets are increasingly pricing a world in which climate volatility, geopolitical disruption and government policy can alter production and trade simultaneously. That combination is likely to ensure that the final quarter of 2026 remains one of the most important and potentially volatile periods for global commodity markets.
Alberto Peixoto E:
albertopeixoto@apcommodities.london T: +44(0) 7570 714 981
SEPTEMBER RISK WATCH
Brazil rainfall India monsoon Black Sea exports European maize drought ⛽Biofuel demand
19 | ADMISI - The Ghost In The Machine | Q3 Edition 2026
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