Cocoa prices dip on reports of buoyant supply
Cocoa has declined 19 per cent from a 30-year high of $3,510 on 16 December, according to Bloomberg, bucking the broad upward trend of other commodities, with industry experts predicting that supplies of the confectionery material will be bigger than last year because of the improved prospects of the crop in the Ivory Coast.
In the past season, the Ivory Coast produced about 35 percent of the world’s cocoa in the 12 months through to September, claims the International Cocoa Organization (ICO).
And some dealers have reported that a higher output forecast than expected was now likely for the crop from the world’s second biggest producer of cocoa, Ghana.
However, cocoa grindings, which offer an indication of demand, are estimated to have decreased by 6.6 per cent to 3.508 million metric tons for the 2008/2009 cocoa year, according to a recent report from International Cocoa Organization (ICO).
This reduction in demand is feeding the industry observation that chocolate is far less recession proof than was predicted with 2009 proving to be a challenging year for some of the biggest manufacturers of chocolate.
The Swiss chocolate industry recorded losses for the first time in six years, reported industry body Chocosuisse last month.
The group announced that sales fell 6.4 per cent in 2009 as both warm temperatures and the economic downturn inhibited consumer indulgence in chocolate.
The decline in sales compared to 2008 was spread equally across the domestic and export markets, said the assocation of Swiss chocolate makers.
In a year-on-year comparison, sales went down 5.9 per cent to 174,109 tonnes while turnover across the industry dropped by 6.4 per cent to reach CHF 1,702m (€1,160m), stated Chocosuisse.