In a year where inflation continues to slow its growth, some commodities have continued to become more expensive at a dizzying pace. In 2024, this will be the case for cocoa and coffee, the two basic resources whose price is increasing the most on the market, and which have reached unsuspected heights, in the case of cocoa, causing its average price to multiply fivefold. historical. Poor climatic conditions for crops are spreading across the world and, in the case of cocoa, they are penalizing the harvests of the two largest producers, Ghana and Ivory Coast. In the coffee sector, production problems are focused on Brazil, but Europe also plays a role in the latest increases in both raw materials, due to the regulatory chaos that Brussels is generating with the new law in preparation to combat global deforestation.
It is said that breakfast is the most important meal of the day, and for millions of people, coffee and cocoa are essential components from the first hours of the day. In 2024, these two raw materials will be protagonists of the raw materials market: before any metal, before any energy resource, such as oil or gas, or any other food, Cocoa and coffee are becoming more and more expensive at a dizzying pace.
In the case of cocoa, the annual increase already exceeds 102% and is now moving at $8,479 per ton on the American raw materials market. This price is not unusual: it exceeds almost 5 times the price historically paid, or nearly $1,800 per ton. For Arabica coffee, the price increase is 50% and is paid at $2.79 per pound, the highest price since 2011, and more than double the historical average of $0.3 per pound.
The rise in prices experienced by the two raw materials can be explained by the problems affecting the main crops. In the case of coffee, the drought in Brazil, the world’s main grain producer, has raised serious doubts about this year’s good harvest. In the cocoa sector, the problems are the opposite: excessive rain increases the fears harvests in Ghana and Ivory Coast, the world’s largest producers, will be worse than expected.
There is, however, a common element in the rise of both raw materials, linked to European Union regulations. In summer 2023, the Commission approved regulations aimed at protecting the world from deforestation, a law that industry companies have criticized for its lack of clarity. The entry into force of the regulation has been delayed until early 2026, and along the way, the debate in the European Parliament seems to end up forcing it to be revised. The problem is that, if there is no agreement in the negotiations between the European Commission, the European Parliament and the European Council, the regulations could end up being adopted without changes, and the market has already made it clear that their respect is an obligation. upward pressure on coffee and cocoa prices.
Cocoa suffers from rains in West Africa
If drought has been a problem for cocoa crops in recent years, the problem is now the opposite. Ghana and Ivory Coast account for more than 60% of global cocoa production, and problems have arisen recently due to excessive rains. Last week, Bloomberg reported that some buyers had refused shipments of cocoa from Ivory Coast, finding that the beans were moldy, a symptom of exposure to excessive humidity.
At the same time, cocoa warehouses in the United States are showing the lowest inventory levels since 2005, a decline that raises fears of a larger-than-expected production shortfall.
Coffee needs more water
Even though the rains have finally reached the Brazilian coffee fields, the production potential of the planet’s main coffee exporter is being called into question, having appeared too late. “It is not certain that the trees will have enough energy to produce a strong harvest, after the severe drought that the country has suffered this year,” explains Mark Bowman, analyst at ADM Investor Services.
Forecasts from StoneX, a financial services company specializing in global markets, suggest that The 2025/2026 harvest will be 65.5 million bags of coffee, compared to 65.9 million bags the previous year.. For the company, production of the Arabica variety will be 11% lower than the previous year and will reach 40 million bags.
Whether this is due to more or less water than normal, and although these are regions located thousands of kilometers from Spain, the unfavorable weather conditions make the price of breakfast higher in Spanish homes. We will have to wait and see if conditions improve in the coming months and if Brussels’ regulatory plans do not end up increasing breakfast inflation even further.
