COMMODITIES  MARKETS  -  Cocoa,  Coffee,  Tea  and  Sugar

Strong demand for cocoa, coffee and tea is expected to continue in 2018. Cocoa prices had a poor year in 2017 due to the rising production from Ivory Coast and Ghana, the two major world producers. Despite increasing demand from India and China, cocoa price may still remain under pressure in 2018 due to supply glut.

 

As for coffee, the world coffee production in 2018 is preliminary projected to increase by 0.8%, with Asia & Oceania expected to grow by 4.4%, according to the International Coffee Organisation (ICO). Beneficial weather and adequate water supply is expected to boost yields in Vietnam, the largest regional coffee producer and second largest globally. While tea prices hit record highs for Sri Lanka in 2017, global tea prices are also expected to rise faster amidst strong global demand, particularly from China.

 

As for sugar, according to the European Commission, the increased global sugar production will put more pressure on the already low world sugar prices. In addition, with the end of sugar quotas, EU sugar prices will become even more exposed to world price volatility.

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