Major commodities profiled in SOCO
The price of coffee plummeted 70 percent between 1997 and 2001, threatening the livelihoods of an estimated 25 million people and triggering food emergencies in several countries in Africa and Central America. According to SOCO, "this steep decline left coffee prices lower than they had been 30 years earlier."
Cocoa prices followed a similar trend but turned around briefly in 2000, only to falter by late 2003 as supplies started to rise again. In this case, says FAO , the market was weakened further by competition from "cocoa butter equivalent," as the European Union (EU) relaxed its regulations on the use of fats derived from other sources to replace some of the cocoa butter in chocolates.
World sugar prices in the second half of the 2003/04 crop year were also under downward price pressure caused by record production and surplus stocks.
Horticultural products like bananas and oranges remain sensitive to market balance. In 2003, increased supplies from Latin America and sluggish demand depressed banana prices. Frozen concentrated orange juice prices were similarly influenced. While demand growth has been significant for tropical fruits, price levels remain sensitive to market supply and demand.
Dairy products and meat
International prices for dairy products have been bolstered in recent months by limited export supplies and sustained import demand, but international meat markets faced ongoing disruption due to animal disease outbreaks. During the first half of 2004, SOCO reports, about one-third of global meat exports were affected by outbreaks of avian flu or by identified cases of bovine spongiform encephalopathy (BSE, or mad cow disease). Import bans on poultry and beef from disease-affected countries are leading to higher prices for products originating in disease-free zones.
Fibers and raw materials
Cotton, rubber and jute all benefited recently from stronger demand and slower supply growth. Prices for hides and skins, on the other hand, declined through 2003 because of weak demand and increased supply.
Cereals and oilcrops
SOCO says that international prices for most cereals surged during the second half of 2003, reflecting tight market conditions. Oilseeds fared rather differently, with prices improving steadily over the past few years from the low levels of 1999-2000. Producers have responded with a robust increase in production. With demand firm and stocks at relatively low levels, both global output and prices for oilcrop products are expected to continue their rise in the short term.
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