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Extreme weather causes breakfast prices to increase by 52% in a year
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Extreme weather causes breakfast prices to increase by 52% in a year

created Forex Club22 May 2024

The cost of products making up a standard breakfast increased by 52%. in one year, led by large jumps in cocoa and pork prices - according to the latest Breakfast Index of the investment platform eToro.

In a nutshell:

  • The eToro Breakfast Index tracks the prices of basic breakfast products,
  • Cocoa prices have almost tripled (267%) in just one year, following historically low rainfall in West Africa.
  • Orange juice prices have increased due to unfavorable weather conditions and diseases that reduce yields,
  • 52 percent the increase in the prices of breakfast products is much higher than the increase in inflation, which amounted to 2,4% in April.

Food is becoming more expensive

The rate of increase in the prices of basic foodstuffs is significantly higher CPI inflation, which in the same period amounted to 2,4 percent. This indicates that Polish consumers will likely face further price pressure.

Paweł Majtkowski, eToro market analyst, commented:

Prices of basic food products have experienced enormous volatility since the pandemic and the outbreak of the war in Ukraine. While some of these supply chain pressures have eased, extreme weather and crop diseases across the globe have resulted in increased volatility in some key breakfast food prices. The cocoa, orange and coffee harvests were hardest hit last year, with many producers currently operating at reduced capacity and using reserve stocks wherever possible. 

It's possible that the seismic price divergence we're seeing in breakfast products could start to impact consumer behavior. Prices of some breakfast items such as wheat and milk, are falling, and other products, such as orange juice, Kakao i kawa, are reaching record levels.

Cocoa prices saw the sharpest increase of all breakfast products, rising 267%. over the last year. Serious drought in West Africa, the region producing 80 percent cocoa in the world, has contributed significantly to the supply shortage and price increases.

Orange juice has experienced similar supply pressures from crop diseases and extreme weather events in the United States, southern Europe and Brazil. The eToro index (Breakfast Commodity Index) increased by 33%. in the last 12 months. In turn, wheat and milk prices have fallen by 17% over the last year. and 7 percent

Table: Comparison of breakfast products' results over time:

Commodity

Price change since the beginning of the year (YTD)

Price change over the last 12 months

Price change over the last 24 months

Wheat

-7%

-17%

-54%

Sugar

-1%

-22%

-4%

Cocoa

154%

267%

332%

Oat

-2%

16%

-46%

Orange juice

21%

33%

104%

Milk

-1%

-7%

-42%

Coffee

30%

22%

6%

Pork

33%

57%

-42%

Tea

-2%

42%

34%

eToro Breakfast Commodity Index

36%

52%

32%

Source: eToro

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