Global market uncertainty impacting on international cocoa production, says ICCO
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The demand for cocoa is likely to overtake supply for the remaining part of the 2021/22 season, but wider global economic uncertainty will continue to impact on the sector, according to latest figures from the International Cocoa Organisation (ICCO)
The ICCO attributed its projection to an upturn in grindings recorded in the second quarter of 2022 in Europe and SouthEast Asia. However, it noted there was an inverse situation in North America, which posed key challenges.
The report observed that the upturn in processing activity did not seem to be sufficient to counterbalance the effects of current microeconomic parameters as it highlighted findings from the latest quarterly grindings of three trade associations, namely, the European Cocoa Association (ECA), the National Confectioners’ Association (NCA), and the Cocoa Association of Asia (CAA).
According to the latest quarterly data, grindings rose 2.03 percent year-on-year in Europe to reach 364,081 tonnes during the period under review. The ICCO noted that this may have been done in anticipation of fast-rising energy costs on the continent. Despite the encouraging upturn in processing, the report showed 11 percent year-on-year decline in import of semi-finished products to the region, which was recorded at 68,805 tonnes at the end of the second quarter of this year.
Data in South East Asia found that cocoa processing activities in the region rose 3.64 percent to 228,895 tonnes in the second quarter of 2022 against 220,865 tonnes recorded in the corresponding period of 2021. Also, net exports of semi-finished products in bean equivalent in South-East Asia decreased by 27 percent to 398,767 tonnes.
On the other hand, the NCA reported a year-on-year quarterly decline of 6.29 percent in cocoa processing. This, it said, amounts to 115,899 tonnes against 123,680 tonnes recorded during the second quarter of 2021.
In North America, net imports of semi-finished products in bean equivalent rose 22 percent from 512,046 tonnes to 623,449 tonnes, indicating that a drop in grindings has been mitigated by import of cocoa processed outside of the region.
On a cumulative basis, the ICCO noted that the trend in grindings is positive for Europe and South-East Asia, but negative for North America. The report further noted that since the start of the 2021/22 crop year, grindings increased year-on-year in both Europe and South-East Asia, but processing activities plunged in the United States.
The report also showed that at the end of the third quarter of the 2021/22 season, processed cocoa was up 4.21 percent above the level recorded a year earlier, amounting to 1.103 million tonnes. In South-East Asia, grindings increased by 3.26 percent year-on-year to reach 673,517 tonnes. However, a 3.47 percent decline in grindings was recorded for the North American region.