Over the past few weeks Procurement Leaders has been reporting on continuing levels of volatility in the global markets with many commodities causing specific concern. However, the past week has witnessed huge leaps across many agricultural commodities, with coffee and cotton prices jumping significantly. Coffee is one commodity which has been on the rise quite significantly and this week was no exception, as The Intercontinental Exchange (ICE) reported that coffee has risen by over 6.5% on the week and by over 10% on the month. The Financial Times said that this rise was due to the price of arabica beans, which surged on Thursday above the key $2 a pound level for the first time in 13 years. It is thought that this is due to fears of lower crops in key producing nations, such as Vietnam, Columbia and Central America. In one of our Friday blogs we reported on suppliers using innovation to combat rising cocoa prices and this has been supported by prices increasing further by 1.5% on the last week, which is nearly a 2% increase on the month. Sugar is another soft commodity which has been volatile for months and the last week saw it rise by 4.5% on the week and a near 11% on the month, while, although orange juice was up by 1.3% on the week, it fell by nearly 7% on the month. Last week’s Commodity Watch also reported on the worrying cotton volatility which has been reigning for some weeks and this week saw no sign of it calming down, as the last week saw cotton rise by nearly 9% on the week and by over 18% on the month, which reveals a significant jump from last week’s monthly rise of 12.5%. These price hikes are thought to be due to poor production in some of the biggest supply countries such as Pakistan. Many commodities reported a fall this week with some plastics, energy and metals reporting the biggest drops, these include; tin which has fallen by over 1.6% on the week, representing a fall of over 11% on the month; while natural gas is down by nearly 6% on the week and by over 14% on the month. The London Metal Exchange (LME) also reported that North American polypropylene has fallen by over 5.3% on the week and this represents a drop of nearly 14.5% on the month. However, it was wheat which had the most notable fall with the Chicago Mercantile Exchange (CME) reporting that it fell by 4.8% on the week and by over 6.8% on the month, after weeks of wheat prices rising due to the Russian wheat export ban and poor crop production elsewhere in the world as reported in one of our recent blogs. For an in-depth look at this issue, you can see my recent analysis piece on the topic here.

Source