Market News Update

Tariffs are the latest factor that can affect prices from basic ingredients to finished products – and it just keeps getting more complex. Most markets continue to have normal volatility in pricing but now with tariffs some items have seen more significant pricing fluctuations including products from China with a 25% tariff. There are also trickle-down affects from the tariffs on other markets as investors are being affected in the stock and commodity markets and in the end, everything is tied together. As always knowledge is power and great planning is the best way to maximize profitability. The busy holiday season is approaching and with strong communications and tools like the Sparrow Splash we will do what we can to keep you all informed.

Chocolate (Cocoa Bean Derivatives)

The bean market has an added potential new factor that will likely have a major effect on prices in 2020. The Ivory Coast is trying to set a farm gate minimum price so that farmers begin to earn a higher living wage. Most would agree that the farmers should earn a higher and more fair wage for growing cocoa however there are also competitive pricing and corporate factors that make any upward changes a challenge. We do expect to see higher prices in the future as systems are put in place to ensure that farmers are more fairly compensated which should also be an incentive to increase and improve the cocoa bean supply chain. With all of this in mind and worldwide consumption continuing to increase coverage for both chocolate and cocoa powder products into 2020 is recommended, especially high fat cocoa powder as demand is very strong.

Compound (Non Cocoa Bean Derivatives)

Compound prices are stable despite some extra volatility in the edible oil markets. Sugar prices are slightly soft currently but still within a normal range. Prices for compound products that require cocoa as an ingredient have firmed a little as cocoa powder prices begin to creep up and the market watches for the proposed market increases.

Coconut (Desiccated, Toasted and Sweetened)

Coconut prices have fallen to levels not seen in a few years so contract now to cover your needs into early 2020. Product from origin is very favorably priced with the current challenge being available ocean freight to move the product which has increased freight costs. Sweet flake coconut is also well priced with low nut and sugar pricing.

Dairy Market (Buttermilk and Whole Milk Powder)

Dairy prices remain somewhat firm with the extremely hot summer reducing European production. US production is down due to a reduction of the dairy cow headcount. Liquid milk consumption is declining as dairy alternatives continue to become more mainstream with products such as Almond and soymilk increasing their market share. Whey prices are also firm with increased demand due to the popularity of high protein products.

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Caraway

Caraway prices have eased as this years’ harvest figures from Canada and Europe are very strong so there should be plenty of product available. Volume users should consider some coverage into 2020 at current prices.

Poppy

Poppy prices have begun to ease from recent highs as new product begins to arrive in the US. However current projections for the 2019 harvest are less bullish. As the outlook for the current harvest declines, we are seeing some tightening in the market, but prices should remain below recent highs into the 4th quarter. Keep an eye on the Poppy market as any disruptions in the supply chain could result in a price spike like earlier this year.

sesame seeds Sesame (Natural and Hulled)

Sesame prices are stable to slightly soft as the spring crop was strong and the African crop is looking good. Demand remains very strong for sesame but as long as there is sufficient supply prices should remain stable at or near current levels.

Sunflower, Millet and Flax

Sunflower, Millet and Flax crops were not affected too badly by the flooding seen earlier this year as the areas hit are a little further east. Continued imports of sunflower help to keep prices low as well. Look for stable prices for these commodities.