Is the commodity crisis turning a corner? Summary
- Cocoa prices have dropped but the potential for volatility remains
- Sugar hit a five-year low with surplus expected to keep prices stable
- Coffee prices stay near record highs but forecasted to decline gradually
- Commodity easing driven by higher production, weaker demand and better weather
- Climate risks and supply constraints mean crisis is not fully resolved
For the past two years, the commodity crisis has kept food manufacturers on edge.
Cocoa grew to unseen heights last year before surpassing that peak this January. Both arabica and robusta coffee have been under pressure due to poor environmental conditions in Brazil and Vietnam. Even sugar was last year reaching astronomic prices.
Now, things seem to be moving in the right direction. Cocoa has dropped down to near pre-crisis levels. Sugar recently reached a five-year low. Even the price of coffee, despite currently remaining sky-high, is predicted to decline next year.
But is the commodity crisis really turning a corner? Or are we simply living in a calm moment, before the next storm hits?
Cocoa prices fall
The price of cocoa has been one of the biggest stories in food of the past two years, pushing manufacturers to raise prices, try out alternative materials, and in some cases reduce cocoa content to the extend that they’re no longer able to call products “chocolate”.
Yet prices are currently looking good. At the time of writing, cocoa is $5,529.11 per tonne, similar levels to those seen in early last year, before the crisis had really started to take hold.
According to commodity price prediction platform ChAI, prices are expected to fall even further in 2026, albeit at a slower rate.
Yet manufacturers should temper their optimism, suggests Stephen Butler, CCO and co-founder at ChAI.
Cocoa prices are "unlikely to fall significantly from current levels," he explains. “Whilst demand has been dropping, global cocoa supplies look to be smaller than previously forecast.”
The World Cocoa Organisation has revised down their expected 2024/25 cocoa surplus from 142,000 tonnes to 49,000 tonnes, due to worse than expected production.
Cocoa prices have also begun to climb back up from late-November lows, although they remain far lower than peaks seen in January.
While the cocoa situation is looking better than it has for some time, manufacturers are not out of the woods yet.
Sugar at a five-year low
Two years ago, the price of sugar was sending manufacturers into panic mode. The rise happened in part due to climatic pressures.
However, it recently reached a five-year low, suggesting that the danger, at least for now, had passed.
The price has gone up slightly since its absolute lowest. Yet Butler is optimistic that we won’t see any massive spikes any time soon.
“Sugar prices are unlikely to rally significantly in 2026 based on the expectation of a global sugar surplus in the coming year.”
Key bodies such as the International Sugar Organization (ISO) and the Czarnikow Group, a supply chain solutions company, predict that the sugar surplus will increase, with production outpacing consumption.
While prices won’t necessarily remain low forever, further spikes are, at least for now, looking unlikely.
Coffee remains high, but prices could soon decline
The price of coffee remains sky-high. Since the beginning of 2025, according to Trading Economics, prices have been near-consistently higher than for the previous ten years.
Arabica is suffering in particular, due to droughts, irregular flowering, and the looming European Union Deforestation Regulation (EUDR).
Yet ChAI predicts both arabica and robusta coffee prices to fall in the coming months.
Increased production in both arabica-producing regions such as Brazil and robusta-producing regions like Vietnam could lead to lowering prices, says Butler.
Prices are not expected to fall dramatically, but will likely stabilise over the next year. Cristina Scocchia, CEO of coffee giant Illy, expects prices of green coffee (unroasted beans) to stabilise to between $2.50 and $3 (€2.15 to €2.58) per pound in the next 15 months.
Is the commodity crisis turning a corner?
In short, no. While things are looking good in some areas at the moment, the fundamental causes of the crisis – drought, heat and other climatic pressures – remain.
Nevertheless, it’s not a mere fluke that the crisis has declined somewhat in severity. It is, instead, down to the efforts of manufacturers in dealing with it.
“It’s a combination of more supplies of soft commodities available – where cocoa and sugar markets have gone from a global deficit in recent years, now to a global surplus as more investment in production facilities and efficiencies in growing techniques increased yields, aligned with friendlier weather patterns in 2025 and into 2026″ says Butler.
It’s also the case of weaker demand. Demand from consumers has declined in many of the products these commodities serve, and investors have been more bearish around the commodities themselves.
While these factors have contributed to easing price pressures, manufacturers must remain vigilant for the years ahead.