For those complaining about price volatility, soft commodities are not a place to be right now. These situations put stress on buying strategies and they don’t show any sign of easing up. Still, for some it’s not just uncertainty driving these erratic prices.

Looking through the soft commodity futures, and particularly the changes over the last month, three figures caught my eye. Cocoa futures have risen 6.46%, Sugar (no.11) has risen 14.68% and coffee has rocketed 22.3% in the last month.

Understandably, it wasn’t that long ago we were talking about soft commodities hitting the heights – but there is an interesting sideline to this, as I was reading in the FT recently.

The ballooning price would seem to have no small matter to do with the influence of certain traders, particularly in the London market, amassing strong positions through buying up large chunks of the market, then manipulating the futures prices.

Although there is, as far as I have understood from various sources, nothing illegal in this – yet the London International Financial Futures Exchange received complaints from 16 trading organisations a couple of weeks ago saying they were “shocked with what is happening on the London cocoa market”.

The implication, whether founded or not, is that the kind of speculation these plaintiffs are unhappy with destabilises markets for consumers and suppliers. Many take the view that it is a lack of transparency and unreliable data that is making this market less predictable. Either way the effect is the same and it will make various commodity buyers nervous.

The reality is that tight supplies are pushing these prices up at an alarming rate and managing that will be a big test for procurement as recovery continues to be dogged with uncertainty. Whether or not its the action of traders, farmers or the exchange, the main thing that matters is having the intelligence to anticipate it, and the foresight to build in measures to adapt.