The ICE Futures U.S. exchange, home to Canadian canola contracts, is also the primary price discovery platform for the so-called “soft” commodities, including coffee, cocoa, sugar and frozen concentrated orange juice.
While Canada does export some sugar, the country is largely a price-taker for all those commodities and holiday bakers may feel an extra pinch this year.
Sugar
Read Also
Manitoba sees cabbage seed pod weevil surge
Cabbage seed pod weevil has crossed into true canola pest territory in Manitoba this year, following years of minimal population counts
Online message boards have lit up with people looking for some of the “good stuff”, a.k.a. sugar, because a strike at the Rogers Sugar refinery in British Columbia has led to sporadic supply disruptions of numerous products.
When sugar is available, there may be added sticker shock. In addition to the general inflationary pressures seen in all grocery stores, sugar futures are trading at their highest level in more than a decade.
The nearby ICE Futures sugar contract traded above 28 cents per pound in early November for the first time since 2011, with prices still hovering in the 27 cents per pound range.
In a move familiar to Western Canadian pulse growers, India had a poor sugarcane crop and the government has imposed export restrictions to stabilize domestic prices. This contributed to the price rise. Rains threatening sugar beets in Europe, a drought in Thailand, and export issues in Brazil were additional contributing factors.
Cocoa
Cocoa futures hit their highest level since 1978 this month, trading above US$4,000 per tonne. A worldwide shortage has seen prices rise by 40 per cent over the past year. Supplies were already tight going into the latest growing season, but a delayed harvest in Ghana and Ivory Coast – two of the world’s largest cocoa growers – has exaggerated those concerns.
Orange juice
Boxes of mandarin oranges have been on grocery store shelves for a few weeks already, but frozen concentrated orange juice futures on the ICE platform had a near-vertical climb to trade above US$400 per 1,500 pounds for the first time ever.
Citrus greening disease has decimated orange groves. Weather issues in Florida and California also cut into supplies and bullish speculators added fuel to the fire by jumping on the bandwagon.
Coffee
ICE-monitored arabica coffee inventories hit their tightest level in 24 years this month, while robusta inventories were only slightly above their record low posted in August.
Much like grains and oilseeds, South American weather conditions are also a key factor to watch in the coffee market, as El Nino weather patterns may cut into production this year. The supply tightness has led to nearby strength in coffee futures, but unlike the other softs, prices remain well below record levels.
