Global cocoa demand will outstrip supply until 2014-2015 because of pests, disease and aging plantations, said the International Cocoa Organization.
“We now have what we call a structural deficit because cocoa trees are old, farmers are old,” Executive Director Jean-Marc Anga said at a conference in Indonesia today. “We will find ourselves in five to 10 years where cocoa producers are too old to tend to their farms without the youth taking over.” The organization expects a deficit of 45,000 metric tons in the 2012-2013 year ending September.
The shortage may support prices that fell 5.4 percent this year in New York and dropped to a nine-month low on March 7. Processors are expanding capacity to grind beans for use in chocolate in response to demand. The market is expanding 2 percent to 3 percent a year, says Zurich-based Barry Callebaut AG, the biggest maker of bulk chocolate. Demand has exceeded supply in 10 of the past 20 years, ICCO data show.
Consumers in producing countries are also realizing the benefit of eating chocolate, said Anga. The content of cocoa in confectionery has also increased in the past 10 years in traditional markets such as Europe and the U.S., he said.
World grindings will climb 1.5 percent in 2012-2013 from a year earlier as production drops 1.8 percent, ICCO data show. The market had a surplus of 86,000 tons in 2011-2012.
Futures in New York dropped 0.7 percent to close at $2,115 a ton on March 15 on ICE Futures US.