While the price of cocoa stagnates, that of chocolate rises, driven by inflation


Inflation is eroding consumers’ purchasing power, prompting them to prioritize the consumption of essential goods over luxury goods, including chocolate, notes the International Cocoa Organization (ICCO) in its monthly market report. this morning. However, it is still too early to measure the real impact this will have on chocolate demand. It is necessary, specifies the intergovernmental organization, to wait for the publication of all the grinding data that this month will provide “A first indication of the direction of world cocoa demand”. It should be remembered that grinding in Europe in the first quarter of 2022 increased by 4.4% to 373.498 t according to the European Cocoa Association and by 6.1% in March alone in the Ivory Coast; since October they have reached 315,000 t compared to 302,000 t in the same period last season. At the moment, the data for North America and then those for Asia are expected, with no date specified.

And the ICCO to detail the impact of various factors on the foundations of cocoa. Rising energy prices? For producing countries, this increases the price of transport in port and by sea: from July 2019 to September 2021, transport costs have multiplied by more than 10, going from $ 1.342 to … $ 10.839! The cost of transportation began to decline at the start of the 2021/22 cocoa campaign, but still remained at $ 9,430 in March 2022.

On the side of the importing countries, the surge in energy prices weighs heavily on the industrial costs for processing and producing chocolate. Producers can therefore choose between reducing the margins generated in the transformation process or increasing the price of consumer chocolate, or both! And the ICCO takes the example of the UK, where inflation recently hit 6.2% leading Cadbury Dairy Milk, a subsidiary of Mondelez International, to reduce the size of its chocolate bar by 10%.
Faced with this galloping inflation, world cocoa prices have not changed for almost a year, from $ 2,462 in March 2021 to $ 2,461 in March 2022. Only in March, the subject of the monthly ICCO report, after a first part in prices rose on the prospect of a shortage of bean supply in 2021/22, then fell against the backdrop of a war base in Ukraine because “This could reduce travel to Western Europe and thus reduce traffic to airports, an important place for chocolate purchases. “ Then, prices started to rise again because the weather was not very favorable in West Africa, but also because Cote d’Ivoire cocoa batches were rejected for quality reasons, which caused prices to rise.

As regards volumes, the ICCO recalls that arrivals in Ivorian ports from 1 October to 10 April increased by 1.2% compared to the same period last season, to 1,709 Mt. Ivorian exports, for their part, they decreased by 15.4% from October to the end of January, to 764,107 t. Grinding in the Ivory Coast increased by 3.95% from October to the end of February to 263,000 t.

As for Ghana, purchases fell 34% at the end of March, to 524,000 ta due to the unfavorable weather.

The two countries maintained their guaranteed price at the planter.

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