Francisco Redruello, senior analyst for food at Euromonitor, told ConfectioneryNews.com: “We don’t see in the next 16 years any problem with supply”
“We are not saying the ICCO is wrong – we are just comparing different data. We don’t expect a huge increase in prices unless there is a drought,” he said.
Euromonitor’s forecasts are based on interviews with the largest commodity manufacturers. Manufacturers give Euromonitor projections and the research organization takes an average and compares to its existing data on demand for cocoa products.
Demand for chocolate
Redruello said that the market had seen bumper crops in the past three years meaning the industry was still absorbing stocks.
“We expect a much lower demand for cocoa butter and cocoa powder compared to ICCO,” he added.
While ICCO expects demand for cocoa-based products like chocolate to rise, Redruello said that the chocolate market had been experiencing stalling growth in Western Europe.
Cocoa grinds, an indicator of demand for chocolate products, were released for Europe yesterday and showed the lowest stats for seven years. See HERE.
Moderate chocolate growth
However, Redruello said that demand from emerging markets such as China would keep retail volume sales for chocolate confectionery growing.
“We are not expecting a decline in chocolate confectionery – we are expecting moderate growth,” he said.
Euromonitor has forecasted an 11% global rise in retail volume sales for chocolate btrween 2012 and 2017.
“That’s 2% every single year. It’s not spectacular growth,” said Redruello.
All major chocolate manufacturers including Mondelez, Mars and Hershey have pledged to source 100% sustainable cocoa by 2020 – some through certification such as Fairtrade or Rainforest Alliance.
“Certification doesn’t mean automatically that prices are going up or demand for chocolate products are going up,” said Redruello.
Last year, the principal cocoa growing country, Ivory Coast, introduced cocoa reforms that set a guaranteed a farm gate price of 725 CFA francs ($1,47) per kg.
“It will not make a difference to increase supply significantly,” said Redruello, adding that reforms would mainly improve standards.
He added that it was not in interests of farmers to increase supply dramatically, because if demand for chocolate products was low, there would be surpluses and cocoa prices would come down.
Pay more for cocoa to boost yields
However, he said there was much scope to improve productivity by using fertilizers and grafting techniques.
“Grinders will have to pay more money for cocoa beans to improve productivity,” he said.
Redruello said that he got the sense that chocolate makers were worried about the supply situation during the World Cocoa Conference in Abidjan last November. However, in his recent blog piece, he said there was no need to panic.