Cocoa Market Intelligence

Cocoa Market Description

Cocoa prices are expected to rise, due to steep demand, especially for cocoa butter. West African countries like Ivory Coast, Ghana, and Nigeria, continue to dominate the cocoa bean production over the years because of the favorable climatic conditions prevailing in these regions. West Africa and Indonesia are the leading cocoa producers, accounting for more than 70 percent of the global cocoa output. High demand for cocoa beans and favorable conditions in Ghana are an added advantage to the cocoa market which is expected to increase the cocoa price. Netherlands and the U.S. comprise more than 50% of the imports of cocoa bean for the past 5 years.

The report includes cost structure analysis, pricing analysis, trade dynamics, end-use demand analysis and industry analysis of cocoa derivatives like cocoa butter, cocoa liquor, and cocoa powder. The report also explains the challenges involved in the cocoa supply chain in detail. The report further explores major trends prevailing in the cocoa industry along with its PESTEL analysis. The cocoa procurement insights suggest that strengthening of co-operatives is the key for removing the intermediaries in supply chain, and it is expected to bring savings of 10–12 percent in the cocoa procurement. The report also includes sustainability measures and supplier intelligence on cocoa producers like Cargill Inc., OLAM and Barry Callebaut.

Beroe gathers intelligence through primary sources that include industry experts, researchers, and consultants, as well as current suppliers, producers and distributors. Secondary sources can include business journals, newsletters, magazines, market research data, company sources, and industry associations. Following data collation, analysis, and strategic review, the Final Research Report is published on Beroe LiVE.

Report Coverage

Cocoa - Supply Analysis
Historical Production Trend and Forecast of the Top Three Producing Countries
Cocoa - Trade Dynamics
Cocoa - Pricing Analysis

Cocoa Market Trend, Analysis & Forecast

Category Intelligence on Cocoa covers the following

Information relating to market, supply, cost, and pricing analysis
Hard to find data on cost and TCO models, supplier details, and performance benchmarks
Macroeconomic and regional trends impacting cost, supply, and other market dynamics
Category-specific negotiation and sourcing advice

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Executive Summary

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Market Analysis

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Supply Analysis

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Cost & Pricing Analysis

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Best Practices

1. Cocoa Executive Summary

1.1 Executive Summary

2. Cocoa Market Overview

2.1 Cocoa, Cocoa Butter and Powder - Material Process Flow
2.2 Cocoa and Derivatives - Supply, Demand, Trade Dynamics, Pricing Analysis, Cost Structure Analysis

3. Cocoa Industry Analysis

3.1 Porter’s FiveForces Analysis
3.2 Challenges in Cocoa Supply Chain
3.3 Drivers and Constraints in Cocoa Market
3.4 Trends/Innovations/Technology
3.5 PESTEL Analysis

4. Cocoa Procurement Insights

4.1 Cocoa Supply Chain
4.2 Sustainability Measures Adopted by Top Cocoa buyers
4.3 Best Trading Regions for US
4.4 Best Trading Regions for Netherlands
4.5 Best Trading Regions for France

5. Cocoa Supplier Intelligence

5.1 Ivory Coast Cocoa Processors
5.2 Ghana Cocoa Processors
5.3 Indonesia Cocoa Processors
5.4 Key Supplier Profiles

Global Cocoa Market Outlook

Cocoa prices are expected to rise, due to steep demand, especially for cocoa butter, which is extracted from cocoa pods.The prices are expected to decrease from December 2017 and then increase from February 2018. Estimated price lock in August 2018 for three months could lead to a saving of 0.6 percent, six-month lock could save 1 percent, and 9 months will save 1.2 percent compared to spot buying. The percentage difference is minimal, however with erratic climate spot buying will lead to very high price compared to price lock contracts

cocoa-global-market-size

Contract Structures

Direct Buying from Farmers >2-–3 years

Direct buying from farmers is usually carried over in long contracts for efficient procurement
This type of contract has a constraint of reaching the farmers regularly and supplying them technical management, which companies perform as a sustainability action
Buying from intermediates may be an easier option of spot buying at a cheaper price

Buying from Intermediates (6–12 months) Short Term/Spot buying
Farmers do not get fair pay, and hence, the sustainability of cocoa prices, in the future, would be questionable

Buying through Co-operatives >2 years

Presence of co-operatives, who liaise between the farmer and the buyer, usually take care of a fair price at both the ends
Usually, this type of contract is long term for more than 1–2 years
The active participation of co-operatives is directly correlated to the country’s political influence and unification of the farmers, which is a drawback of this contract

Cocoa - Supply Analysis

Ghana introduced the hand-pollination method last year leading to an increased production to above 900,000 metric tons according to the regulator. For the incoming season Ghana is expected to produce well above the same mark again. The cocoa grinding sector in Ivory Coast, despite an increase in bean output in 2017/18, is facing a challenge. This is due to the current military and social unrest in the country, hindering investment opportunities
West African countries (Ivory Coast, Ghana, Nigeria) continue to dominate the cocoa bean production over the years because of favorable climatic conditions prevailing in these regions. Apart from West Africa, Indonesia is the major producer of cocoa beans
There are concerns about the crop from West African nations –Ivory Coast and Ghana, due to poor bean quality. Ghana is expected to partly offset the decline in production from Ivory Coast
Emerging markets, like Jamaica, are receiving government support and aid to develop their cocoa farming and processing capabilities
In 2017, grindings are estimated at 4.03 MMT, which is a rise of nearly 10 percent from 2015 grindings (3.8 MMT)

Cocoa Beans - Supply Analysis

The prospects of an improved harvest from West Africa (70 percent of World’s cocoa) is looking up, mainly attributed to the less severity of the Harmattan winds (than anticipated)
Post the 2015 supply crunch, owing to adverse growing conditions, the La Nina brought favorable rainfall in the second half of 2016, leading to a commensurate surplus overall in 2016
If good weather conditions prevail, a second surplus in 2017 can be anticipated. However, the El Nino in 2017 may limit prospects of the crop output, with the production estimates needing emendation
This supply surge is viewed as a temporary glut, and supply crunch may resume by the second half of 2017, as most of the crops are stuck in logistics and rotting on the plant
With increased supply anticipated, if the current unprofitable situation for farmers does not improve, it may cause them to shift to alternate crops, which could consequently resume a firm market situation

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