With cocoa demand on the rise, Latin America seeks a breakthrough
By Hugo Di Zazzo, AFP
June 2, 2014, 12:01 am TWN
MONTEVIDEO--Latin America, the birthplace of cocoa, trails far behind West Africa in terms of production, but an increase in world demand — notably in Asia — could give the region a needed boost.
The cocoa beans from Central and South America are known as being of high quality — fulfilling a certain niche, especially among consumers in Europe.
"We have good signs of growth in Asia, where the cocoa market will grow from five to nine percent in the next four to five years," said Juergen Steinemann, managing director of Barry Callebaut, one of the world's largest cocoa processors.
Latin America will account for 16 percent of world production in 2013-2014, or 666,000 tons out of a total of 4.1 million tons, according to the London-based International Cocoa Organization (ICCO).
That marks a slight drop compared to the previous harvest.
But the ICCO says the last harvest left a shortage of about 175,000 tons, due in part to drought in Africa, for a world chocolate market worth about 80 billion euros (US$109 billion).
So prices shot up 25 percent in 2013, and again in early 2014. Last weekend, a ton of cocoa sold for nearly 1,900 pounds (US$3,200) in London and more than US$3,000 in New York.
India and China Demand on Rise
Thomas Pugh, a commodities specialist with the British investment consultancy Capital Economics, predicts a fairly strong increase in Latin American supply in the coming years.
"The biggest producers will continue to be in West Africa, but the forecasts for Latin America are good," he told AFP.
Demand for cocoa from emerging countries is booming, especially in China, said Florence Pradier, the secretary general of Paris-based chocolate association Alliance 7.
That, paired with a strong resurgence in demand from traditional chocolate consumers in Europe and North America, is good news for producers.