Excellent Prospects for Cocoa

Projections are for a deficit of 1 million metric tons globally in 2020 due to the rapid growth in demand for chocolate in Asia.

Thursday, July 17, 2014

The growth in demand for chocolate in Asia has made the future price of cocoa soar on the international market, which on July 3 reached $3,097 a tonne on the ICE futures market, the highest level since August 2011.

The growth in demand from Asia, including China and India could lead to a shortage of grain that could extend into the next decade, with a projected 1 million metric tons deficit by 2020 estimated by the British firm Hardman & Hardman, according to an article on Bloomberg.com.

Juergen Steinemann, president of Barry Callebaut, one of the largest firms producing chocolate in the world, told Bloomberg.com that "... ' In the longer term, the shortage of quality cocoa is a serious concern for our entire industry.'"

Bloomberg.com adds that "...Asia, with 3,700 million people, or over half of the world's population, will be the "mainstay" of the consumption of cocoa and chocolate, said Gerard Manley, CEO of Olam International Ltd. based in Singapore, which supplies ten percent of cocoa beans.The shortage will drive up prices by ten percent at least until the end of 2014. "

More on this topic

Cacao Production Will Keep Rising In 2015

December 2014

Projections are that next year's global grain production will remain insufficient to meet the growing demand, raising the international price to historically high levels.

In the international market the price of cocoa reported a 10% increase up to September this year, reaching $3.39 per ton of grain in the stock market in New York. It is expected that this trend will continue in 2015 due to high demand for the product.

Global Demand for Cocoa Beans

May 2014

It is estimated that in Asia alone demand for the grain will increase between 5% and 9% in the next four to five years, opening up opportunities for high quality cocoa for america producers.

Encouraged by the deficit of about 175,000 tonnes in the last world harvest, the return of traditional consumers in Europe and the United States and increasing consumption in emerging countries, cocoa prices rose by 25% in 2013 and continued to rise in early 2014, reaching a cost per ton of £1,900 ($3.200 U.S. dollars) in London and more than $3,000 in New York.

Price of Cocoa Rose 24% In 2013

December 2013

It is estimated that in 2014 it will rise by another 14% due to growth in global demand, specifically generated in Asia.

An article by Bloomberg.com reports that "global cocoa stocks are on route to having the most prolonged deficit in more than 50 years as demand for chocolate soars in Asia."

Cocoa Shortages and Price Increases Expected

November 2012

The sustained growth in demand for cocoa will continue next season, with prices exceeding $2,600 per tonne.

An article in Emol.com reports that "cocoa mills will increase production coming to a peak in the next two years, in order to meet the record demand for chocolate, in a time when the dip in supply from West Africa has resulted in the first seed shortages to have occurred in three seasons.

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