The latest report from the International Cocoa Organization (ICCO) reveals that cocoa processing activities for the first quarter of 2022/2023 have decreased in main cocoa-consuming regions in particular Europe, South-East Asia and North America.
The slowdown in cocoa processing activities, the ICCO has said, could have been partly fuelled by high operation costs amid global inflation and persistent, high energy costs.
The European Cocoa Association posted data indicating a year-on-year decline of 1.7% from 365,826 tonnes down to 359,777 tonnes in grinding. The Cocoa Association of Asia (CAA) also posted a slight year-on-year drop of 0.2% from 231,039 tonnes to 230,806 tonnes.
Grindings for each first quarter of the previous three cocoa years represented around one fourth of the total volumes of cocoa ground at the time. Declining grindings during the last quarter of 2022 moved in tandem with net imports of cocoa beans and cocoa semi-finished products in the EU whereas in the US and Canada, net imports were higher year-on-year.
Latest trade statistics from Eurostat indicate that imports of cocoa beans and cocoa semi-finished products were reduced by 13.1% year-on-year, while imports of cocoa beans in the US and Canada has increased by 10%.
The decline in processing activities in the US was accompanied by an increase in net imports of cocoa beans and cocoa semi-finished products while in the EU, decreased numbers of grindings and net imports suggests a “plausible shrinkage”.
Contrary to an overall decline in grindings in main consuming markets, top African cocoa growers are expected to further expand their domestic cocoa processing activities. Côte d’Ivoire is expected to process nearly half of the raw cocoa beans produced in the country.
Traditionally, the mid-crop harvest is processed at origin because the size and quality of the beans are smaller and lower than the main crop. The Conseil du Café Cacao (CCC) and the Ghana Cocoa Board (COCOBOD) sell the mid-crop harvest at a discount to all processors within the respective countries.
One question that could be raised, the ICCO said, is whether a cocoa exporter will make more money by directly selling beans of bigger size and higher quality, or by processing part of the main crop at origin. A new cocoa processing plant is scheduled to be built in Côte d’Ivoire this year, with more plants expected to be built in its stead.
The cocoa exporters’ association in Côte d’Ivoire, GEPEX, reported that grindings of its members reached 233,743 tonnes, a 10.8% increase of grindings since the start of the 2022/2023 cocoa season.
“With consumers in developed countries becoming more discerning and cocoa imports in that part of the world on course to start complying with upcoming laws regarding sustainability, deforestation, child labour, traceability, etc., imports of beans for the operations of cocoa processors are likely to focus more on certain qualities other than the import volumes,” the ICCO concluded in its report.
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