Pastry and Bakery Ingredients Market Report

As we enter the new year, the pastry and bakery ingredients market is evolving, driven by shifting consumer preferences, new innovations, and fluctuating commodity prices. This quarterly Pastry and Bakery Ingredients Market Report highlights key developments in seven essential ingredient categories: Cocoa, Sugar & Sweeteners, Fruits, Oils & Fats, Dairy, Flour, and Eggs. Additionally, we provide forecasted trends and insights into the market dynamics that will shape the pastry and bakery industry in the coming months.

Cocoa Market Trends – Price Surge, Supply Challenges, and Growing Demand for High-Quality Beans

In 2024, the cocoa market has experienced bullish momentum, with record-high prices for cocoa products. This surge in prices is largely due to reduced production from key cocoa-producing regions. The International Cocoa Organization (ICCO) projects global cocoa production to reach 4.382 million tons for the upcoming season, an increase of 50,400 tons compared to previous projections. This boost in supply is expected to help stabilize the market somewhat. However, supply chain disruptions, particularly in West Africa, continue to create market volatility. For example, cocoa futures hit record highs in April 2024, reflecting a 25% decline in production from leading producers such as Côte d’Ivoire and Ghana. Ivory Coast cocoa arrivals in mid-December were 75,000 MT – still higher than last year – but the harvest is slowing as the dry season intensifies.

Cocoa futures have shown significant fluctuations throughout late 2024 and into January 2025. On January 28, London futures were priced at £8,907.33 per ton, while New York futures were at US$11,153.67 per ton. The ICCO daily price ranged from US$11,109.40 to €10,655.03 per ton, reflecting an upward trend. Comparing with earlier months, cocoa prices have risen notably since December 2024, when the ICCO daily price was US$10,353.05 or €9,887.07 per ton, and even more sharply since October 2024, when it was US$6,582.86 or €6,043.50 per ton. These price increases highlight the ongoing volatility in the cocoa market, influenced by supply challenges and weather conditions.

Forecast: The cocoa market is expected to see slight price stabilization in the second half of 2025 as production improves. However, supply chain pressures will continue to drive higher prices for high-quality cocoa beans.

Source: ICCO – Barry Callebaut

Sugar and Sweeteners Market Trends – Price Fluctuations, U.S. Supply, and Growing Demand for Alternatives

Mexico’s export quotas to the U.S. have increased to maintain adequate sugar inventory levels. The slicing period is progressing smoothly, with cold weather helping optimize beet sugar storage. However, market uncertainty persists regarding the potential impact of tariffs on Mexican sugar imports under the Trump administration.

The USDA has raised the 2024/25 U.S. sugar supply forecast to 14.494 million short tons (STRV), driven by higher beginning stocks, increased beet sugar production, and stronger sugar imports. Meanwhile, Mexico’s sugar balance remains largely unchanged, with a slight increase in imports and exports to maintain the 2.5-month target for ending stocks.

On a global scale, 2024/25 sugar production is estimated to increase by 2.8 million tons to 186.6 million tons, with higher production in China, India, and Thailand offsetting declines in Brazil. Global sugar consumption is expected to reach a new record, driven by growing demand in markets like India. Sugar exports are rising due to higher shipments from Thailand, but global stocks are projected to be lower, with reduced stocks in Thailand countering a rise in India.

In the U.S., production is estimated to decrease slightly to 8.4 million tons due to lower sugar beet and sugarcane yields. Sugar imports are also projected to decline, with quota programs set at minimum levels, and consumption remains practically unchanged. Ending stocks are reduced due to lower imports.

Simultaneously, the high-intensity sweeteners market is on the rise, expected to reach $5.338 billion by 2034, driven by growing demand for low-calorie, healthier sugar alternatives in baked goods and pastries.

Forecast: Sugar prices may stabilize due to increased imports, but demand for natural and low-calorie sweeteners will continue to grow in the U.S. and global markets.

Source: USDA – Sugar and Sweeteners Market Outlook, AIFI

Fruit Ingredient Market Trends – Global Growth and Key Challenges

The global fruit ingredient market is experiencing notable changes. Brazilian orange juice exports declined by 19.7% in the first half of the 2024/25 crop year; however, revenues surged by 42.7%, driven by higher international prices. This shift highlights the pressures on fruit production and pricing, as well as the resilience of certain markets. By 2028, global fruit production is expected to reach 998 million metric tons, up from 934 million metric tons in 2023, driven by the growing demand for natural, fruit-based ingredients.

In the U.S., the fruit market was valued at approximately $56.8 billion in 2023, with projections showing a compound annual growth rate (CAGR) of 5.3% from 2024 to 2030. This growth is fueled by increasing health awareness and rising demand for plant-based and clean-label foods. Berries, particularly blueberries, strawberries, and raspberries, have seen significant demand in recent years, reflecting these trends.

Focus on Strawberries

• Chinese Strawberries: Early harvests, influenced by cold weather, have led to reduced volumes and higher prices. Despite this, exports of Dandong strawberries have grown by over 30%, expanding into markets such as Thailand and Indonesia. However, high air freight costs remain a significant challenge.
• Egyptian Strawberries: Despite rising production costs and regulatory hurdles, Egypt continues to lead in strawberry exports, showcasing its adaptability and resilience in the global market.

Focus on Raspberries

• North American Raspberries: The industry is thriving with record harvests in Mexico and the introduction of innovative new varieties in the U.S. Pest management remains a challenge but is being effectively addressed to ensure high quality and yield.
• South American Raspberries: Chile and Argentina are seeing a moderate increase in raspberry production. While weather-related challenges such as unexpected rainfall have affected some regions, overall yield is expected to meet global demand.

The U.S. remains heavily reliant on fruit imports, particularly during off-seasons. Mexico is a key supplier of avocados, berries, and tomatoes, while Chile and Peru export large quantities of grapes and citrus. However, this dependence on imports makes the U.S. market vulnerable to risks such as trade disruptions, weather events in key producing countries, and rising transportation costs, which can influence pricing and availability.

Forecast: While fruit availability will continue to fluctuate due to seasonal variations, global demand for fruit-based ingredients, such as purées and concentrates, is expected to rise, driven by the increasing popularity of natural and clean-label products.

Source: Reuters – Brazil’s Orange Juice Exports – USDA Economic Research Service – Grand View Research

Fats and Oils Market Growth: Rising Demand for Healthier and Sustainable Oils

The global fats and oils market is poised for significant growth, with a valuation of $182.94 billion in 2024, projected to reach $196.61 billion by 2025. This growth translates into a robust compound annual growth rate (CAGR) of 7.5%. The rising demand for healthier, plant-based oils, particularly those used in baking, alongside an increased focus on sustainable sourcing practices, are key factors driving this growth. Consumers are increasingly prioritizing ethically sourced oils, such as palm oil and avocado oil, which further boosts market expansion.

Worldwide, the oils and fats market is expected to continue its upward trajectory, with a CAGR of 8.9%, reaching $229.38 billion by 2028. This trend reflects growing awareness around health-conscious food choices and the shift toward sustainable production practices.

In 2024, the palm oil market experienced significant price fluctuations due to production challenges in major producing regions like Indonesia and Malaysia, along with shifts in global trade. Despite these obstacles, palm oil revenues increased, driven by higher prices and strong demand amid constrained supply. This highlights the volatility within the oils and fats market, as well as the resilience of key players in adapting to changing market conditions.

Forecast: The increasing demand for plant-based, sustainable oils is set to continue shaping the market in the coming years. With a growing preference for healthier alternatives in both baking and frying, the oils and fats industry will increasingly focus on innovative solutions that cater to both health-conscious consumers and the need for environmental sustainability.

Source: The Business Research Company – Fats and Oils Market Report

Dairy Market Trends: Recovery and Growth in Key Sectors

The global dairy market is currently facing seasonal weakness, with dairy derivatives showing a broad decline. This slowdown is primarily due to a reduction in demand as industrial users complete their holiday season operations. Weaker interest in milk powders was evident during the Global Dairy Trade (GDT) Pulse event, further impacted by the outlook for increased milk production in the upcoming calendar year. All major dairy exporting regions are forecasting favorable conditions, contributing to a more balanced supply and further dampening short-term demand.

In addition, milk prices have seen a significant increase since the beginning of 2025, rising by 1.69 USD/CWT, or 9.03%, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. Historically, milk prices reached an all-time high of 25.20 USD/CWT in May 2022. This uptick in milk prices, alongside the seasonal dip in dairy demand, adds complexity to the market dynamics.

Despite the seasonal dip, the global dairy market remains resilient, with steady growth projections for the coming years. As demand picks up post-holiday, especially in key regions like Asia and the Middle East, the market is expected to recover. The continued rise in dairy consumption in emerging markets, combined with a growing preference for premium dairy products, including organic and plant-based alternatives, will drive this recovery.

Forecast: By 2025, the global dairy market is expected to reach a value of $645 billion. This growth will be fueled by the increasing demand for premium dairy products, plant-based dairy alternatives, and rising consumption in emerging markets. The shift toward organic and plant-based dairy products is expected to play a key role in shaping the market’s trajectory, particularly as health-conscious consumers seek more sustainable options.

Source: The Bullvine – Dairy Outlook – Global Dairy Trade (GDT) – USDA – Euromonitor International

Flour and Starch Market: Growth Driven by Demand for Gluten-Free and Plant-Based Products

As we enter 2025, the global flour and starch market is experiencing typical post-holiday demand fluctuations. Production forecasts for major wheat and starch-producing regions remain positive, supported by strong harvests and improved agricultural conditions. Despite challenges such as climate events – droughts and floods – and ongoing supply chain disruptions impacting crop yields and global prices, the market is expected to show steady recovery throughout the year. The market remains sensitive to shifts in weather patterns, agricultural output, and global trade policies.

The U.S. winter wheat area planted is expected to increase by 2% to 34.1 million acres for the 2025/26 marketing year, according to the USDA, National Agricultural Statistics Service (NASS) Winter Wheat and Canola Seedings report. This increase contrasts with the longer-term trend of declining winter wheat acreage in favor of corn and soybeans. Recent seasons have seen a resurgence in winter wheat planted area following the historic low in 2020/21. USDA, NASS estimates that acreage for Hard Red Winter, Soft Red Winter, and White Winter wheat are all up slightly for 2025/26.

2025 Forecast: The global flour and starch market is projected to grow at a compound annual growth rate (CAGR) of 4.2%, reaching a value of $300 billion by the end of 2025. This growth will be driven by rising demand for staple foods and a surge in popularity of gluten-free and plant-based products, particularly in emerging markets. The shift toward health-conscious and sustainable food choices is driving new product innovations in the flour and starch sector, contributing to continued market expansion.

Sources: USDA Economic Research Service, Euromonitor International, Finance Yahoo

Egg Market: Global Growth and Key Challenges

The egg market is projected to grow at a compound annual growth rate (CAGR) of 3.1%, reaching an estimated value of $280 billion by 2025. This growth is supported by improvements in poultry health and feed availability, which are stabilizing supply. Increasing demand for protein-rich foods, expanding cage-free and organic egg production, and rising consumption in emerging markets will be key drivers of growth.

Price Surge in the U.S.

Egg prices in the U.S. have seen a sharp increase, rising 1.28 USD/DOZEN, or 22.03%, since the beginning of 2025. U.S. egg prices reached an all-time high of 7.09 USD/DOZEN in January 2025. The Department of Agriculture’s price outlook predicts that egg prices will increase by about 20% in 2025, compared to a 2.2% increase for overall food prices.

Impact of Avian Influenza

This sharp rise is largely attributed to an ongoing outbreak of highly pathogenic avian influenza (AI), or bird flu, which has significantly strained egg supply. Indeed, the AI outbreak has become one of the most severe in U.S. history. Since mid-October 2024, nearly 25 million layers have been culled, representing more than 7% of total U.S. egg production, with a substantial portion of these losses concentrated in the cage-free sector. The AI virus has spread across several key regions, including California, Missouri, and North Carolina, and has also affected other poultry species.

Forecast: Looking ahead, the egg market is expected to recover gradually, with production stabilizing in key regions as the industry works to mitigate the impact of the AI outbreak. The forecast for 2025 suggests continued steady demand for eggs, driven by the rising preference for protein-rich foods, the expansion of sustainable and organic egg production, and a growing appetite for eggs in emerging markets. Assuming the AI outbreak is brought under control, production conditions are likely to improve, supporting the market’s positive growth trajectory.

Source: Eggs Unlimited Data – USDA Agricultural Marketing Service, Euromonitor International, and Trading Economics

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