2024 will be remembered as the year of super increases in agricultural raw materials. Coffee, cocoa, butter, palm oil, sunflower oil, hazelnuts and walnuts have reached record prices. In some cases the increases exceeded +80%. Reasons? Climate crisis, imbalance between supply and demand and sometimes even European politics (see the case of butter). The extraordinary increases in 2024 have had a significant impact on the entire food supply chain, from production to processing, affecting companies in the sector and final consumers. And 2025 does not open with reassuring forecasts.
Coffee is the most obvious case, with espresso and cappuccino in bars at unprecedented prices. The price of the raw material has tripled in two years (robusta +83%, arabica +48%) due to the drought and climate change that have affected producing countries such as Brazil and Vietnam. The Brazilian logistics crisis, with chronic delays in ports for months, then increased transport costs and reduced supply. Furthermore, the strengthening dollar has inflated international prices. This mix of factors has led to record prices on the global market.
Cocoa follows, which in 2024 reached an all-time high of 5500 euros per ton, doubling its price. The main causes are the reduction in supply (-180 thousand tonnes in Ghana) due to extreme climatic events and the cocoa virus, aggravated by obsolete agricultural techniques and lack of investments. Speculation by hedge funds, with purchases of futures worth 8 billion euros, amplified the price increase. This combination of factors has led to a shortage of raw materials and record prices.
And then there is butter, which has reached price levels never seen before, exceeding 8 euros per kilowith a 50% increase in 2024 compared to the year before. Also having an impact in this case is the climate change that is affecting cattle farming, with heat stress phenomena that reduce milk production and product quality. The war in Ukraine has aggravated the situation, increasing the costs of fertilizers and indirectly also affecting the price of milk. The competition between butter and cheese, which is more profitable, has further reduced supply on the market, pushing prices up. And then there is the structural reduction in milk production in Europe, influenced by Brussels policies which aim to reduce the number of cattle to reduce polluting emissions.
In 2024, the prices of vegetable oils increased, in particular palm oil and sunflower oil. The climate problems in Southeast Asia have slowed down production and at the same time the growing domestic demand has slowed down exports and raised prices. Climate change has also pushed the prices of hazelnuts, walnuts and almonds. Crop yields have fallen in countries such as Turkey and the United States, and constant demand in the face of limited supply has driven up costs. Rare exceptions are legumes, such as lentils and chickpeas, which have seen a decrease in prices of between 30% and 40%, thanks to good yields in North American markets.
Predictions for 2025? Not yet replenished inventories and crucial weather conditions make the agricultural commodity market still highly volatile. And the inflation factor, which is decreasing but still under special surveillance, should not be underestimated. Prices are therefore still unpredictable, far from a stable situation as in the past. Uncertainty reigns and the food industry and consumers will have to be ready, even for new increases.
