Blame El Nino for rising prices

Prices of raw materials surged under the influence of the El Nino phenomenon this year and the impact is expected to be passed on to consumers in the coming months.

El Nino-correlated dryness has been present in much of Southeast Asia, India, Australia, and parts of Africa, fueling costs of soft commodities like sugar, robusta, and cocoa, according to Rabobank.

This year, orange juice futures soared by 80 percent to record highs, and cocoa prices also jumped 64 percent to a 46-year high. Robusta coffee beans reached a 15-year peak, while sugar prices climbed 13 percent despite a recent dip after a 12-year high.

Rabobank points to a link between El Nino and soaring sugar prices, as this phenomenon leads to drier conditions in key export nations like Thailand, India, and Australia. The effects on cocoa are subdued as price hikes won't immediately deter demand or boost production due to unique market mechanisms.

The bank anticipates consumers will feel the impact of higher cocoa prices in 2024.