Global Commodities Market Update: Sugar, Cocoa, and Coffee Prices Experience Volatility

The global commodities market has experienced significant volatility in recent weeks, with sugar, cocoa, and coffee prices fluctuating sharply. The pension trustees of UK confectioner Cadbury PLC have taken out an insurance policy to mitigate risks associated with liabilities, while a group of lawmakers is urging the UK government to prevent Royal Bank of Scotland from financing Kraft's GBP10.2 billion bid for Cadbury.

Meanwhile, the global price of raw sugar could spike sharply higher in the coming weeks and months due to a global shortage. CSR Ltd.'s sugar unit has signed an agreement with Syngenta Crop Protection AG, furthering the Australian industry's links with global biotechnology companies. Colombian sugar exports have risen 95% to 813,831 metric tons in the first 10 months of the year.

Key Takeaways:

The global price of raw sugar is expected to spike sharply higher due to a global shortage, with the chief executive of Australia's Canegrowers lobby, Ian Ballantyne, stating that prices could rise sharply in the coming weeks and months.
CSR Ltd.'s sugar unit has signed an agreement with Syngenta Crop Protection AG, furthering the Australian industry's links with global biotechnology companies.
Colombian sugar exports have risen 95% to 813,831 metric tons in the first 10 months of the year.
High world cocoa prices are increasing cocoa farmer insecurity in Ivory Coast, with producers stating that robberies against farmers have increased due to the current high price of the crop.
U.S. cocoa futures fell as prices succumbed to profit-taking pressure after topping out near 30-year highs in recent sessions.
Drinking more than three cups of tea a day cuts the risk of diabetes, with regular tea drinkers having a 25% lower chance of developing Type 2 diabetes.

Statistics:

IPLC Cadbury PLC liabilities: N/A
Colombian sugar exports: 813,831 metric tons (up 95% from previous year)
U.S. cocoa futures: fell due to profit-taking pressure
U.S. tea drinkers with lower risk of diabetes: 25% lower chance of developing Type 2 diabetes
Sugar contract cancellations in Brazil: possible

Sources:

Dow Jones Commodities News via Comtex (Dec 16, 2009)
Financial Times (cited in Dow Jones Commodities News, Dec 16, 2009)
Dow Jones Newswires (Dec 16, 2009)
The Daily Mail (cited in Dow Jones Newswires, Dec 16, 2009)
Comtex SmarTrend Alert (Dec 12, 2009)