International agricultural and energy commodity markets are entering 2026 with mixed signals. According to Areté's latest update – "Market Insights" – there are declines in coffee and sugar, early signs of recovery for some dairy commodities, and a sharp surge in European gas prices linked to geopolitical tensions in the Strait of Hormuz.
On the coffee front, international prices showed a significant correction between January and February. On the Italian Trade Commission (ICE), Arabica lost 17%, while Robusta fell 14%, with a reduction in arbitrage between the two varieties, although they remain at historically high levels. The outlook for a recovery in production for the 2026/27 crop is weighing heavily on prices.
Initial estimates indicate a 17% increase in Brazilian production compared to the previous season, driven particularly by Arabica. Indonesia is also expected to have a bumper harvest, while Vietnam is accelerating exports thanks to increased product availability. On the financial front, net long positions in Arabica have fallen to their lowest levels in two years.
Despite this, the market remains fragile. Certified stocks are still below year-ago levels, while in Colombia production and exports remain declining, and shipments from Brazil remain limited while awaiting the new harvest. Added to this are geopolitical tensions and uncertainties about energy and logistics costs, factors that continue to fuel short-term volatility.
Sugar also experienced a downward trend. In February, financial prices fell 3,8% for crude sugar and 4% for white sugar compared to the previous month, with prices more than 20% below the average of the last five marketing years. The premium for white sugar over crude sugar stood at $95,6 per ton, down 14% from the five-year average.
The decline is driven by the global surplus forecast for the 2025/26 crop year. In Brazil, production reached 40,2 million tonnes, while in India, ISMA's third estimate indicates a 12% increase, with additional volumes authorized for export. Furthermore, in China, the possibility of a tax on sugary drinks could dampen domestic demand.
On the European market, prices fell by about 1% in February, amid higher-than-expected production and multi-year high inventories. New zero-duty quotas from Mercosur also weighed heavily, with 180 tons from Brazil and 10 tons from Paraguay. For the 2026/27 crop year, however, the reduction in cultivated acreage in the EU could push the European bloc back into a net importer position.
Meanwhile, the first signs of recovery are emerging in the dairy sector after the sharp deflationary phase that began in the summer of 2025. In February, prices on the German market in Kempten recorded increases for butter (+2,4%), whole milk powder (+4,1%), skimmed milk (+12,7%) and Edam (+0,4%).
However, prices remain far from last year's peaks. Compared to July 2025, butter is still down 41,5%, whole milk powder is down 27,8%, and Edam is down 28,9%. German spot milk listed in Milan, despite rising 4,8% between January and February, remains at its lowest level since 2016.
The pressure on prices stems from particularly strong European supply. In the second half of 2025, milk deliveries in the EU grew by 4,1% year-on-year, with significant production increases in Germany (+5,8%) and France (+5,6%). Favorable weather conditions and a decline in slaughter numbers contributed to supporting supply.
The recent recovery in prices has also been supported by the increased competitiveness of European exports, supported by the weakening euro and the reduction of Chinese tariffs on European cheeses. However, the sector remains exposed to risks related to energy costs, particularly significant for an energy-intensive supply chain.
Energy itself is one of the main drivers of instability today. Tensions in the Middle East and difficulties in transit through the Strait of Hormuz have brought significant volatility to European gas markets. In the three days following the outbreak of the conflict, TTF prices rose by more than 50%, exceeding €50 per MWh.
The surge was also reflected in the Italian electricity market, with the PUN (National Price for Electricity) exceeding €160 per MWh. Europe remains heavily dependent on liquefied natural gas, which accounts for approximately 40% of the continent's supplies.
Approximately 20% of the world's LNG transits the Strait of Hormuz, making the European market particularly sensitive to tensions on global energy routes. Relatively low inventories—about 30% at the end of February versus 40% for the same period in 2025—contribute to amplifying volatility.
According to Areté's analysis, the scenario remains different from the 2022 energy crisis: today, the risk is more globally distributed and linked to international competition for LNG, rather than a physical shortage of supply specific to Europe.
