Olam’s ofi maintains stable earnings amid cocoa and coffee price volatility

Olam Group’s food and beverage ingredients business, ofi, maintained broadly stable earnings in H1 2026 despite lower cocoa and coffee input prices, market volatility, and a weaker US dollar against the Singapore dollar. The results highlight how shifting commodity prices, supply risks, and capital pressures are continuing to shape the operating environment for major food ingredient suppliers. 

ofi, which spans Cocoa, Coffee, Dairy, Nuts, Spices, and its food and beverages platform, recorded revenue of S$12.0 billion (US$9.38 billion), down 18.1%, mainly reflecting lower input prices, particularly for cocoa and coffee. EBIT reached S$509.7 million (US$398.5 million), compared with S$535.8 million (US$418.9 million) in H1 2025. 

Olam said the marginal decline in earnings came despite a significant reduction in input prices and capital deployed, as well as currency pressures.

Olam Group executive director and CEO of ofi A. Shekhar says: “Our performance demonstrates the resilience of our integrated business model. Despite continued market volatility and geopolitical uncertainty, we delivered stable earnings with significant reduction in capital deployment, leading to improved capital efficiency, strong cash generation, and higher net earnings.”

“Looking ahead, we remain focused on investing selectively behind growth opportunities while maintaining capital discipline. We are confident that these foundations will continue to support long-term value creation for both ofi and Olam Group stakeholders.”

Cocoa and coffee prices weigh on sales

Lower cocoa and coffee input prices were reportedly the main factor behind the decline in ofi’s revenue during the period.

ofi expects revenue uncertainty to persist due to geopolitical developments, evolving trade policies, macroeconomic conditions, and weather-related supply risks.The business operates across two segments, Global Sourcing and Ingredients & Solutions, supplying food and beverage manufacturers across categories including cocoa, coffee, dairy, nuts, and spices.

Looking ahead, ofi expects uncertainty to persist as geopolitical developments, evolving trade policies, macroeconomic conditions, and weather-related supply risks continue to influence markets.

For food and beverage manufacturers, these factors remain particularly relevant across ingredient categories exposed to agricultural supply conditions and commodity price movements.

ofi reviews agricultural assets

Alongside its financial performance, ofi is reviewing the role of parts of its upstream agricultural portfolio.

The company is evaluating certain assets, particularly its almond orchards, as well as selected coffee, pepper, and cocoa plantations. Olam said the review is intended to improve capital efficiency, strengthen returns, and increase the resilience of earnings.

According to ofi, the move forms part of its focus on disciplined investment and active portfolio management as it navigates uncertain market conditions.

Despite near-term volatility, ofi continues to target low- to mid-single digit volume growth and high single-digit adjusted EBIT growth over the medium term.

Olam advances divestment strategy

In its group, Olam reported revenue of S$12.5 billion (US$9.77 billion), down 18.3%, mainly due to lower input prices at ofi and lower volumes in Olam Global Holdco (OGH), which houses Olam Group’s remaining businesses and assets.

Olam said it remains committed to divesting OGH’s remaining businesses and assets over time and progressively distributing net proceeds through special dividends, while taking its operational and financing requirements into account.

For the remainder of 2026, the group expects the global economic environment to remain affected by geopolitical developments, trade policies, and macroeconomic uncertainty, with potential consequences for demand, international trade flows, and global supply chains.