Mid-2025 Commodity Update: Where Cocoa, Coffee & Sugar Stand Now
Last winter, Kwayga and Expana co-hosted the “2025 Commodity Playbook: Insights Coffee, Sugar and Cocoa for Smarter Sourcing” webinar, offering supermarket buyers expert insights on volatile markets for cocoa, coffee and sugar. Now, halfway through 2025, it’s time to revisit those predictions and see what’s changed — and what strategies supermarket leaders should adopt to stay ahead.
Cocoa: From crisis recovery to persistent fragility
Webinar recap: Steve Wateridge highlighted structural supply deficits from Ivory Coast and Ghana—aged trees, disease outbreaks, and illegal mining restricting output despite expanding production elsewhere.
Today’s reality:
Cocoa prices peaked in early 2025, hitting $10.75 /kg and then gradually easing by mid-June as improved rainfall in West Africa raised expectations for the next harvest. Price corrections in New York and London futures were around 13–15% over two weeks.
The International Cocoa Organization (ICCO)’s June report confirmed that rainfall eased supply fears in Côte d’Ivoire, while optimism around Ghana’s and Latin American production supported sentiment.
Yet structural risk remains: West Africa is now forecast to decline ~10% in output for 2025/26, due to disease, aging farms, and illegal gold mining degrading farmland.
Strategic advice for supermarkets:
Diversify suppliers beyond Côte d’Ivoire and Ghana. Latin America (Brazil, Ecuador, Colombia) and emerging producers offer more options — some buyers are already exploring such relationships.
Use forward contracts or hedging structures to lock in costs and mitigate market volatility.
Continue exploring cocoa butter substitutes or blended formats to reduce exposure—especially in signature products where purity isn’t mandatory.
Coffee: Volatility Continues as Currencies and Crops Shift
What we said: Coffee markets were on edge, with extreme weather disrupting production in Brazil, Colombia, and Vietnam, and tight global stocks pushing prices up.
What’s happened since:
In April, prices dipped briefly due to good rainfall in Brazil and positive crop estimates — but then rebounded sharply due to currency shifts and fresh US tariff uncertainty.
Arabica futures rose from 343 to over 420 c/lb in just three weeks. Robusta prices followed, climbing back above $5,200/mt.
Certified stock levels improved — up 5.6% in April — but remain historically low, keeping the market sensitive to small supply disruptions.
What supermarket buyers should do:
Build flexibility into blends — shifting Arabica/Robusta ratios based on market trends can ease cost pressure.
Diversify sourcing — look beyond traditional suppliers and consider new certified origins (Kwayga can help with this)
Watch the dollar–real exchange rate, which has become a key price driver for imports from Brazil.
Sugar: Steady for Now, But Watch Energy Prices
What we said: Sugar was the most stable of the three commodities, with a balanced supply outlook led by Brazil and India. Prices were expected to stay within a narrow range, with potential tightening during Brazil’s inter-crop season.
What’s happening now: Prices have remained stable, even dipping slightly in April due to lower global energy costs and economic uncertainty. Supply from Brazil and India remains strong, and favourable weather in Asia is supporting a good outlook. However, ongoing shifts in energy prices and trade relations may still cause disruptions later in the year.
What supermarkets should do:
Time purchases smartly — mid-2025 may be a good window as production picks up.
Keep an eye on energy markets — fuel prices can influence sugar processing costs.
Use flexible contracts — to take advantage of small pricing dips when they appear.
Final observations
Markets are proving only partly predictable. Cocoa has retreated from its highs, but underlying supply fragility remains. Coffee continues to see volatility from currency and weather. Sugar, while calmer, is subject to energy-linked shifts and demand softness.
For supermarket leaders, the right combination of diversified sourcing, contract hedging, and dynamic product innovation remains essential. Especially for cocoa and coffee, where cost pressures could squeeze private label margins or force consumer price revisions.
Kwayga’s AI-powered sourcing engine remains a critical tool in this context. By helping supermarket buying teams:
Identify alternative suppliers in new origins or certified pools
Benchmark pricing quickly across global markets
Simulate sourcing scenarios under currency or tariff shocks
