Demand for cocoa in the first quarter of 2021-22 has been stronger than expected, According to the ICCO Cocoa Market Report for 2022, thanks to progress in COVID-19 vaccinations and economies opening up again.
Cocoa grindings data published by the main regional cocoa associations for the first quarter showed an increase in year-on-year quarterly grindings of 6.3% from 344,151 tonnes to 365,826 tonnes in grindings.
The European Cocoa Association (ECA) posted data indicating a year-on-year expansion of 6.3% from 344,151 tonnes to 365,826 tonnes in grindings. In turn, the Cocoa Association of Asia (CAA) posted an identical year-on-year increase (6.3%) from 217,546 tonnes to 231,309 tonnes.
In the US, the National Confectioners’ Association (NCA) published a 1.2% drop from 118,043 tonnes to 116,614 tonnes of cocoa beans grinded. This decrease in grindings for North America caught the market by surprise, the ICCO said, as earlier reports outlined that confectionery sales in the United States had increased over the fourth quarter of 2021.
One reason for the decrease could be that fact that a number of plants reporting their grindings data to the NCA was reduced from 17 in Q4.2020 to 16 during Q4.2021.
“However, it is still unknown whether the reduction in the number of reporting grinders in North America is the sole factor that contributed to the observed reduction in the region’s grindings during Q4.2021,” said the ICCO.
In its report, the ICCO said it is noteworthy that, during the first quarter of the 2020-21 cocoa season, a year-on-year decline was observed in grindings for both Europe and South-East Asia while an increase was recorded in grindings for North America.
It said that grindings data published by the ECA for the fourth quarter of 2020 mirrored a 3.1% dip from 355,201 tonnes to 344,151 tonnes in Europe, whereas the CAA posted a 4.2% reduction from 227,013 tonnes to 217,546 tonnes in grindings for South-East Asia.
Grindings in North America unexpectedly increased by 7% year-on-year from 110,371 tonnes during Q4.2019 to 118,043 tonnes in the course of Q4.2020.
Regarding the effect of the COVID-19 pandemic, grindings for the fourth quarter of 2020/21 were found to be better than expected in North America and South-East Asia, while cocoa processing activities in Europe were seen at a lower-than-anticipated level in Q4.2020.
Key notes from the ICCO’s Cocoa Market Report January 2022
- Grindings data published by the main regional cocoa associations for the first quarter of the 2021/22 cocoa year signalled that cocoa demand for the season started on a strong note.
- Cocoa production in Côte d’Ivoire since the start of the 2021/22 cocoa year is reported to have overtaken last season’s level at 1.340 million tonnes as at 30 January, slightly up by 1.5% compared with the 1.320 million tonnes recorded at the same period of the 2020/21 season. On the contrary in Ghana, the latest available data on purchases of graded and sealed cocoa beans were lower year-on-year.
- During January 2022, prices of the front-month cocoa futures contract oscillated between US$2,238 and US$2,428 per tonne in London and averaged US$2,324 per tonne, slightly lower compared to the average price of US$2,343 per tonne for the nearby contract recorded at the same period of the 2020/21 cocoa year. In New York, the average price of the MAR-22 contract settled at US$2,547 per tonne, up from US$2,528 per tonne recorded in January 2021 and ranged between US$2,420 and US$2,663 per tonne.