Orange juice, cocoa, palm oil, rice prices unstoppable bull run gains steam

Orange Juice price remarkable rally continued this week as concerns about supply continued. According to Barchart, the cash contract for orange juice surged to $397 on Friday, the highest level on record. It has had a strong rally after bottoming at $95 in 2018.

Orange juice hits a record high

The surge in orange juice prices is having an impact on shoppers, who are having to spend more. A bottle that was selling for less than $3 in Walmart a few months ago is now selling for almost $4.

Orange juice has jumped because of lower production in Florida, the biggest producer in the United States. Farmers in the state have reported weak yields in the past few years because of the regular hurricanes. Supply from Brazil has not been enough to fill the gap.

Worse, other food items are getting more expensive as their respective commodities rally. For example, cocoa prices have jumped to a record high. Data by TradingView shows that cocoa was trading at $3,900, 74% above the lowest level in 2022. 

Orange Juice with another all-time high close today… pic.twitter.com/Vwp8gybw4t

— Swordfish (@Swordfishv44183) October 27, 2023

Cocoa and palm oil are soaring

Cocoa has jumped so much because of the ongoing low production in Ghana and Ivory Coast. Many farmers in the region have reported lower yields following years of underinvestment. A recent report by the International Cocoa Organisation said that global cocoa deficit will jump to 140k metric tons.

Cocoa is an important commodity that is used to manufacture chocolate bars and coffee alternatives. It is widely consumed around the world.

Meanwhile, olive oil and palm oil prices have surged to record highs because of weather events in countries like Spain, Greece, and Indonesia.

Other vital commodities have also surged in the past few months. For example, sugar prices have soared and are sitting near the highest level on record. Sugar contracts available to traders have seen their prices jump by over 196% from the pandemic lows.

Rice prices has also soared in the past few years after India ordered a ban in a bid to protect its citizens. India is an important country for rice because it accounts for 40% of global production. As such, prices in other big exporters like Thailand and Vietnam have surged lately.

All these commodities are having an impact on global inflation. The most recent data in the US showed that food inflation rose by 0.2% from August to September and by 3.7% on a YoY basis. This situation will likely worsen as the price of crude oil soars.