The markets are all over the place with stability in some areas and wild volatility in other areas. Being informed should help in your buying decisions as knowledge is power. There are now so many factors that affect ingredient pricing so trying to stay informed means tracking everything from currency fluctuations to weather to tariffs.It’s not like the old days where it was all about supply and demand although those basics still need to be factored into the equation when tracking the markets so read on…
Chocolate (Cocoa Bean Derivatives)
The bean market remains fairly stablewith sufficient supply to meet demand. The most recent forecast is for a record bean harvest from the Ivory Coast, the world’s largest producer. This will likely put some downward pressure on prices. Worldwide demand for cocoa powder is still very strong so no significant reduction in powder prices are expected. There may be some easing in chocolate prices as the butter/powder ratio will likely begin to favor powder. Contracting your powder needs into 2020 is recommended as some manufacturers will likely have capacity issues.
Compound (Non Cocoa Bean Derivatives)
Compound prices are steady to slightly soft as the fear of tariffs with Mexico are mostly behind us and worldwide sugar supplies are good. Edible oils have seen some volatility but remain in a fairly narrow and favorable range overall.
Coconut (Desiccated, Toasted and Sweetened)
Coconut prices dropped significantly in thr last few months and current levels are well below where we were in late 2018. After an extended period with above average pricing for coconut products it is good to see lower prices in the market. Sweet flake prices are also down with a stable sugar market combined with lower coconut costs. Large users may want to get some longer term coverage at current levels.
Dairy Market (Buttermilk and Whole Milk Powder)
Dairy prices increased during the 4th quarter of 2018 with high heat prices seeing the biggest increases. The current market is firm as US exports were much higher in the first quarter compared to LY. US Inventories of dairy powders are well below levels from LY as production is down and as mentioned, exports are up. As we approach the “Spring flush” the fundamentals would suggest that a stable market would be a good thing as a lower market is not expected. Whey prices had dropped but it appears to be supported by the higher powder market pricing. Keep an eye on the dairy markets as any weakness may be an excellent time to jump in and buy.
The lower prices in the recent past have slowly created a demand so we have seen recent increases. Prices should remain firm until Fall when hew product begins to ship and price direction at that time should reflect the size of the 2019 harvest.
Poppy prices are extremely high and are at nightmarish levels for large users. The thought of $2.00 per lb. for poppy seeds was seen as crazy, but now is something we wish for as prices approach $2.40 per lb. The price surge was due primarily to a supply shortage and product scarcity. Where prices go will depend on this year’s upcoming harvest figures but at current levels some easing would be expected.
Sesame (Natural and Hulled)
Sesame prices firmed up last year as supplies began to dwindle but have stablized at or near current levels with some small price swings. The weather will likely play a big role in sesame prices later this year as we are fairly well balanced at current levels. A strong harvest could give us some price relief but a below average harvest could result in prices increasing quickly. Unfortunately, as of now it looks like this year’s harvest is a little late which is not a good sign as this also makes the harvest more prone to bad weather.
Sunflower, Millet and Flax
We have been having a relatively quiet weather year in the mid-west but we may see prices rise with the recent flooding. Seed prices had remained stable at very decent levels and continued imported product had kept prices fairly low. We’ll know in a week or two if there is any major crop damage due to flooding. Transportation costs for both trucking and rail may put a little upward pressure on pricing but nothing really significant.