Short and Sweet: Commodity Costs of Candy Bars on the Rise

Spend Matters is pleased to present a guest post from Nick Peksa of Mintec Ltd.

If you think candy bar, you probably need to be thinking consumer price decrease -- unless "Warning this product may contain nuts" appears. Then we are expecting some serious price increases.

Peanuts US
The export price of peanuts in US has risen 138% since this time last year. The local percentage movement since last year is in high 20's, and still increasing. The US peanut supply has seen a steep fall due to a combination of disease, drought and shifts to other more favored crops such as cotton and corn. Total US peanut production for 2011 is pegged at 1.7m tonnes, down 17% on 2m tonnes in 2010. Georgia's peanut harvest this year is the smallest in two decades. In a typical year, a Georgian crop of 1m tonnes would be expected. This year volumes of only around 0.65m tonnes are forecast. Georgia is by far the largest US peanut producing state with ordinarily about 50% of US supply, followed by Texas (14%), Alabama (12%), Florida (11%) and North Carolina (6%).

Cocoa Butter - London
I wrote about cocoa a few months ago, and the butter trend still continues to slide. The cumulative cocoa arrivals from the Ivory Coast reached 1.4m tonnes by early September, up 23% on the same period a year ago. However, West African output is expected to drop next season. Modest growth in the chocolate market of around 2% is being completely eclipsed by the Asian growth of cocoa power around 20%.

- Nick Peksa, Mintec Ltd.

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