An interesting opportunity opened up on the commodity market this week: cocoa, as one of the few major raw materials, is becoming significantly cheaper, while sugar, oils, soybean meal and crude oil are moving in the opposite direction. For food producers, this is not just another move on a chart. It is a practical question of whether it makes sense to buy now, wait, or at least fix part of the volume for the coming months.
What changed this week
The week from 20 to 26 July showed a clear difference between cocoa and the rest of the market. Cocoa has continued to decline for the third month, while several other commodities are becoming more expensive. This changes the purchasing logic: with cocoa, it makes sense to look at the opportunity; with sugar, oils and energy, the focus should be more on protecting margin and cash flow.
Cocoa is cheaper. That does not mean you should wait forever
Cocoa is trading at around USD 5,327 per tonne and is down 29% year on year. For producers of chocolate, confectionery, semi-finished products or premium desserts, this is a significant change after a period of extremely expensive inputs.
With a decline like this, it is natural to wait and see whether the price falls even lower. But this is exactly where buyers often make a mistake: they try to squeeze a perfect buying point out of a good buying point. In practice, it is more reasonable to secure at least part of the expected consumption rather than speculate on the absolute bottom of the market.
- In practical terms: if you will actually consume cocoa in the coming months, it makes sense to consider a 3–6 month purchase or partial price fixing.
- The risk of waiting: a potential return above USD 6,000/t could very quickly wipe out the current saving.
Sugar and oils are moving in the opposite direction
While cocoa is getting cheaper, sugar, sunflower oil and soybean meal are rising. With these commodities, the question is no longer whether the market is cheap. The question is how quickly higher input prices will be reflected in your margin.
White sugar on ICE is around USD 485/t and is approximately 19.8% higher year on year. Sunflower oil FOB Rotterdam has moved to around USD 1,505/t, and soybean meal has increased by more than a third. With movements like these, passive waiting is more of a risk than a strategy.
- Sugar: if you need it in the coming months, address purchase prices in advance. If you are selling stock, the current level is interesting for a partial sale.
- Oils and meal: if you hold stock, consider selling in parts; when buying, secure availability rather than chasing the last percentage points of price.
Crude oil above USD 90/bbl: do not underestimate logistics
Brent reached approximately USD 90.4 per barrel. That is a level that, in commodities, is reflected not only in energy, but also in transport, processing and logistics surcharges. The effect usually does not appear immediately on the day of the move, but with a delay over the following weeks.
For open contracts with a transport component, we therefore recommend checking rates in advance. Not because there is a need to panic, but because late confirmation of transport can unnecessarily eat into part of the margin.
Prediction markets: another signal, not a crystal ball
We are now also adding a view from prediction markets to Market Watch, mainly Kalshi and Polymarket. Their value lies in the fact that this is not just an analyst comment or a media headline. Participants in these markets risk their own money, so the contract price reflects the collective estimate of the probability of a specific event.
Important: prediction markets should not be treated as certainty. They are useful as another layer of decision-making — together with prices, availability, cash flow, storage capacity and seasonality.
What the buyer should do now
If we translate this article into a concrete purchasing decision, the strategy is simple: with cocoa, use the decline; with more expensive commodities, protect margin; and with energy, monitor the impact on logistics.
- Cocoa — BUY: fix part of consumption for the coming months. Not everything at once, but do not leave the whole of Q3/Q4 open.
- Sugar — HEDGE: if you need sugar, do not deal with it at the last minute. When selling stock, the current price is interesting for partial closing.
- Sunflower oil and soybean meal — SECURE: secure availability, or realize part of your stock. The market has already gone through a strong rebound.
- Brent and transport — MONITOR: check transport rates and surcharges, but do not panic at every move in crude oil.
Need a price for a specific volume?
Table prices are useful for orientation, but not for a binding decision. The real price depends on volume, delivery location, payment terms, delivery date and current supplier availability.
If you are dealing with the purchase or sale of a specific commodity, Rootie can prepare an offer based on the real volume and delivery conditions. That is more practical than making a decision based on a general market price that may not fit your situation.