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Could West Africa lose its cocoa crown?

By Oliver Nieburg+

25-Jun-2014
Last updated on 25-Jun-2014 at 18:04 GMT

Does the long-term future of cocoa lie outside West Africa? Photo Credit: WCF
Does the long-term future of cocoa lie outside West Africa? Photo Credit: WCF

ConfectioneryNews asks industry leaders if cocoa production will gradually move closer to the burgeoning chocolate markets of China and Brazil or whether West Africa will always be the king of cocoa.

70% of the world’s cocoa is grown in West Africa – mainly in two nations, the Côte D’Ivoire and Ghana.

Laurent Pipitone, director of the International Cocoa Organization’s (ICCO's ) economic division, said that because supply was so heavily concentrated in just two nations, it created “quite some concern” for the industry when something happened in these countries.

Europe and Russia together are currently where most cocoa is processed and consumed – but it is in Asia & Oceania where consumption levels are growing while remaining fairly static in the established North American and EU markets.

Would it therefore be beneficial to invest in cocoa production in nations closer to the growing chocolate regions to save on transportation costs and import levies?

Asia Pacific

“Asia-Pacific creates the opportunity to be the first region where you have a growing middle class that's consuming chocolate and you have a pretty developed cocoa sector,” said Andy Harner, global cocoa vice president at Mars Chocolate.

"It would be the first example of a developing economy where you are going to have cocoa and lots of people consuming cocoa.”

Indonesia is the cocoa basket of Asia and the third largest producer in the world. But Jos De Loor, president of Cargill Cocoa & Chocolate, told this site. "Production in the Far East is struggling and Indonesia's production has come down from 700,000 tons five or six years ago to 410,000 tons today.” He said there was a lot of competition from other crops and pressure from tree diseases.

"I think West Africa will remain the most important region in the foreseeable future.”

Nigeria: Rising supply & consumption

Jean-Marc Anga, executive director of ICCO said: “As far as supply is concerned I believe there is great potential still in Africa and in countries like Indonesia.”

He earmarked Nigeria as a rising cocoa producer. “The country is the most populous in Africa.There is huge potential in Nigeria for production to explode. Nigeria also represents a very big market when it comes to consumption.”

He added that while the fastest growing chocolate markets were in India, Brazil and China, consumers in developed regions were also favoring a higher cocoa content in their chocolate, creating an even greater need for more cocoa.

Closer to China?

Editor’s View

Cocoa flavanol content is for now a niche demand for chocolate manufacturers. But as demand for healthier products rises could regions with the highest flavanol levels – namely Latin America – stand to benefit? Fine flavor regions such as Ecuador will also be keen to capitalize on rising demand for premium chocolate in developed markets. ON

Cocoa can only be grown 20 degrees north or South of the Equator, with 75% coming within eight degrees north or south.

This makes cocoa growing in some of the emerging chocolate markets such as China challenging.

"I wouldn’t try in China from a climatological perspective. But If you look to Vietnam it's a kind of border line situation,” said De Loor.

Around a decade ago, Cargill worked with Mars and the Dutch and Vietnamese governments to develop the Vietnamese cocoa sector, but the crop today is still very small at around 7,000 MT per year.

"You might get 50,000 or 150,000 MT in the far future, but it will not be able to replace what's happening in West Africa,” said De Loor.

The two leading chocolate companies, Mars and Mondelēz International, have made some efforts to source cocoa from India – although the Indian cocoa crop is still only a fraction of the global supply.

Cargill: West Africa retains crown but S America grows

However, Brazil is the world’s fifth largest cocoa producer and home to a thriving chocolate market.

“In south America you do see that countries are growing their supply,” said Cargill’s Jos De Loor. “We do expect that percentage wise the growth will be for the most part taking place in South America."

The main producing nations in South America are Brazil, Ecuador and Peru respectively. But even put together these countries fall some way short of levels in the Côte d’Ivoire alone.

"Given the sheer size of west Africa, even if South America could evolve in the next 10-15 years it means 500,000 MT, which compared to West Africa is relatively limited,” said De Loor.

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