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Cocoa Market Analysis


Cocoa beans are used to produce butter and powder. These products are widely used in confectionery and cosmetics. Cocoa butter is the only butter that melts at human body temperature, which makes chocolate such a popular treat in the food market.

Key facts about the global cocoa market
  • Total world cocoa production is relatively small – under 5 million tonnes. However, the value of international trade is high as the product is expensive relative to other agricultural commodities.
  • Cocoa trees require a very specific climatic conditions which mostly lie close to the equator.
  • The largest cocoa producer is Ivory Coast, which produces about 2.22 million tonnes. Ghana is the second-biggest producer, which accounts for 0.85 million tonnes of cocoa.
  • Europe, North America and South America are traditional consumers of cocoa, where consumption has been stagnant recently. However, rising Asian consumption drives growth in the market.
  • Cocoa prices are very volatile. For example, from March 2019 to February 2020 cocoa prices rose by over 50%.

Key themes affecting the global cocoa market

Ivory Coast and Ghana play the most significant role in the cocoa market as two of these countries produce about two-thirds of the world’s cocoa. The weather also plays a significant role in determining overall production: too much dry weather leads to cocoa pods abortion; too much wet weather may cause diseases (the black pod disease is the most common one). Another factor making cocoa prices volatile is political instability in African countries.

In 2019, Ghana and Ivory Coast announced that the countries will charge an additional USD400/tonne premium (Living Income Differential) to raise the low incomes of local farmers. This has complicated price determination by traders and has caused a price rally on the futures market for the preceding crop without the additional premium.

Grinding statistics are the cocoa sector’s best demand indicator. The confectionery and food industry are the main users of cocoa products. But the cosmetic industry is also striving to include more natural ingredients in their products and cocoa butter is increasingly in demand.

Cocoa price ranges
201720182019
Cocoa beans, New York, USD/tonne1800-22001800-29001900-2700
Cocoa beans, London, GBP/tonne1400-16001300-16001600-2000
Cocoa Butter, cents/lb220-280265-348273-310
Cocoa Powder, cents/lb81-9580-9090-100

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FO Licht is the only service in the market that provides comprehensive analysis of near-term market developments for the 12 months ahead, from market trends to supply-demand, production, trade and price forecasts. Subscriptions to cocoa data in FO Licht Data service enables access to detailed historic and current data on the global cocoa market.

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