site.btaState Commission for Commodity Exchanges, Wholesale Markets Predicts No Sharp Movements for 2025

From a market point of view, the State Commission for Commodity Exchanges and Wholesale Markets observed a calm year in 2024, although there remain constant geopolitical tensions, said its chair Vladimir Ivanov in an interview with BTA on Monday.

He stressed that these tensions cannot help but have an impact, which is still not as bad compared to the period of 2021-2022, adding that two years ago the price of cheese was higher than the current one.

Ivanov said that he does not think that there will be sharp movements at the beginning of 2025. "I expect this month there will be a movement in demand because of the holidays. It will hardly be very sharp and of great market importance (...). Then, like every year, there will be a 'dead' period. The closer we get to the spring season, the more goods will start to appear, there will probably be a hold on price levels. We will not see any sharp jump or changes, provided that no new or old geopolitical tensions are created," he pointed out.

He commented that the commercial infrastructure as a whole has not changed significantly and the disadvantages remain, but he suggested that the inauguration of the new US President Donald Trump in January will be an additional factor in calming tensions and stabilizing the market. "There is a dominance of large commercial capital, which creates a competitive environment, but also distorts the market to some extent. If we had a powerful representation in the commercial structures of our producers, for example, the Milk Board had its own market or its own stores, we would observe completely different price levels, or at least the differences wouldn't be so great," Ivanov said.

He stressed that the price for wholesale butter increased in the range of 12-15% on an annual basis, while at the same time the price increase in the supermarket was 70%. As a good example, Ivanov pointed to the Netherlands, explaining that agricultural producers there realize their production through cooperative trade structures. "Thus, supermarkets are in a powerful competitive environment when they buy from this market, as the commercial distribution chains themselves are in competition, not the agricultural producers among themselves," he said, adding that this can also be observed in Germany and Greece.

Commenting on 2024, Ivanov noted that there were very large differences in the retail prices of chocolate products, even though the prices of the raw materials did not imply such a price increase, adding that distribution chains seem to reinsure themselves through higher price levels than needed. "The price of cocoa in January 2023 was USD 9, and in the past four months it has been between USD 6-7. The drought was overcome, a good crop of cocoa is expected, the same goes for coffee in Vietnam, so we should see some stabilization of the cocoa industry," he pointed out, adding that sugar stabilized its price at lower levels of USD 600 per tonne.

"Wheat all year, excluding June, kept the price of USD 200 per tonne, and the market continues to be very tight. The same applies to soybeans and corn, only (the price of) oil moved after September, when the data on the new harvests came out. Nothing special from a market point of view, a normally functioning market", Ivanov summarized.