Representational Image | Pixabay
Text Size:

London/New York: Asian demand for chocolate is driving a surge in the region’s cocoa grindings at a time when processing is easing elsewhere.

Bean grindings in Asia probably climbed 7.5% in the fourth quarter from a year earlier, rounding out an annual record, according to the median response in a survey of analysts, brokers and grinders. Processing likely held steady in Europe, the top consuming region, and declined in North America.

Rising affluence and changing lifestyles in Asia have spurred grinders to turn more beans into butter and powder used to make chocolate bars, drinks, ice cream and biscuits. The International Cocoa Organization in November said India and China will be major drivers of chocolate demand and data this week showed Malaysian grindings jumped 23% last quarter.

“The swing grinder for the world is Asia and it exports an awful lot back to Europe and North America,” said Jonathan Parkman, co-head of agriculture at Marex Spectron Group in London. For consumption, “the only real growth is coming out of Asia. We are not seeing significant growth outside of that area.”

The National Confectioners Association will release North American figures on Thursday, followed by data from the Cocoa Association of Asia and the European Cocoa Association the following day. Here’s a summary of the Bloomberg surveys:

Processing in the West has come under pressure as factory profits eased, cocoa prices rose and chocolate demand showed signs of weakness. In the three months through late December, U.S. retail sales of chocolate candy fell 2.8% in volume from a year earlier, according to Chicago-based market researcher IRI.

“U.S. chocolate sales have suffered a bit from consumers’ concern about sugar content,” said Nick Gentile, managing partner at NickJen Capital Management in New York. Also, the U.S. is importing more products, reducing the need to process beans in America, he said.

Traders said that the data could be distorted if Ferrero Spa, which bought Nestle SA’s U.S. confectionery business, doesn’t contribute to the NCA’s survey. Going forward, processing could also be affected by Ivory Coast’s decision to cut export taxes on processed cocoa products, Marex said.

“If you maintain an export tax on beans but cut it on the processed product in Ivory Coast then you are hugely incentivizing local grindings,” Marex’s Parkman said. “We could see a rise in Ivory Coast grindings relative to other places because of that.”

Also read: No more chocolate by 2050? The risks of a chococalypse are real & we must be mindful


Subscribe to our channels on YouTube & Telegram

Why news media is in crisis & How you can fix it

India needs free, fair, non-hyphenated and questioning journalism even more as it faces multiple crises.

But the news media is in a crisis of its own. There have been brutal layoffs and pay-cuts. The best of journalism is shrinking, yielding to crude prime-time spectacle.

ThePrint has the finest young reporters, columnists and editors working for it. Sustaining journalism of this quality needs smart and thinking people like you to pay for it. Whether you live in India or overseas, you can do it here.

Support Our Journalism