Staples Commodity Costs Down 5% YoY, Morgan Stanley Reports

Staples Index Shows Mixed Signals in April

According to Morgan Stanley's Consumer Staples Commodity Cost Index, costs fell 5% year-over-year as of April 17 but rose 3% month-over-month. This signals ongoing price volatility for the sector, with the index remaining about 40% above pre-pandemic averages.

Detailed Commodity Price Movements

Year-over-year, prices for ethylene (+99%) and propylene (+84%) surged, while costs for cocoa, coffee, and sugar declined. On a monthly basis, propylene (+51%) and ethylene (+50%) led the increases, whereas natural gas prices in Europe and the US fell 20% and 9%, respectively.

2026 Cost Pressure Forecast

Morgan Stanley forecasts a 1% year-over-year cost pressure for the staples sector in 2026, assuming current spot prices. The household and personal care sector faces a 2% headwind, largely due to oil and packaging costs. Meanwhile, chocolate companies face a significant 7% headwind in the first half of 2026 due to cocoa price volatility.

Summary

The annual cost decline provides some relief, but monthly increases and sharp volatility in key commodities like oil and cocoa continue to pose challenges for consumer staples companies.

FAQ

Q: What was the main trend for the Commodity Cost Index in April?
A: The index decreased 5% year-over-year but increased 3% month-over-month.

Q: Which commodities saw the largest annual price increases?
A: Ethylene and propylene saw the largest year-over-year price increases at 99% and 84%, respectively.

Source: Investing.com