World Cocoa Conference 19-23 Nov 2012 Situation and prospects for cocoa supply & demand Laurent Pipitone Director of Economics & Statistics Division 1
Improving market information and transparency One of the core activities of the ICCO Collection and dissemination of statistics: Quarterly Bulletin of Cocoa Statistics Review of market developments (10 years, 1 year, quarterly, monthly) Forecasts Supply & Demand (5 years) Economic studies: price determinants, functioning of the cocoa futures markets, diversification, certification, etc. 2
ICCO: market information The Quarterly Bulletin of Cocoa Statistics Information available? market development reviews, estimates of global cocoa bean supply, demand and stocks as well as historical data; up-to-date and historical data on cocoa bean prices; statistics on the trade of cocoa beans, cocoa products and chocolate; country table statistics for major cocoa-producing and importing countries; unique cocoa consumption data by country; and at a glance information through maps, charts and summary tables
ICCO: market information The monthly Cocoa Market Review Review price developments in the cocoa futures markets (NYSE Liffe and ICE Futures US) during the previous month (2-page document); Review major developments related to the supply and demand for cocoa beans, incl. arrivals, trade, grindings data as well as weather conditions and spread of pests and diseases; Wide dissemination. Free (posted on website, email): http://www.icco.org
The size of the market Cocoa bean production value in 2010/11: US$ 13 billion Retail value of chocolate sales in 2010: US$ 95 billion, of which US$34 billion for European Union and US$18 for the United States Sources: Eurostat, 2011, Euromonitor, NCA, 2010, ICCO staff calculation Top chocolate manufacturers, 2011, total sales in million US$ Company Net Sales 2011 (US$ millions) Kraft Foods Inc (USA) 19,965 Mars Inc (USA) 16,200 Nestlé SA (Switzerland) 12,808 Ferrero Group (Italy) 9,612 Hershey Foods Corp (USA) 6,112 Chocoladefabriken Lindt & Sprüngli AG (Switzerland) 2,796 Top six global confectionery companies that manufacture some chocolate by total confectionery sales value in 2011 Source: Candy Industry, January 2012
Cocoa production (supply) WORLD COCOA PRODUCTION (Gross) 2011/12: 4.050 million tonnes Latin America: 16% (630,000 tonnes) Africa: 71% (2.890 million tonnes) Asia & Oceania 13% (530,000 tonnes) Source: ICCO, Quarterly Bulletin of Cocoa Statistics 6
Main cocoa producing countries 1600 1400 1200 1000 800 1476 1511 879 1025 Top 12 Cocoa producing countries (thousand tonnes) Estimates 2011/12 Estimates 2010/11 600 400 200 0 Côte d'ivoire Ghana 450 Indonesia 440 220 240 205 229 218200 190 Nigeria Cameroon Source: ICCO, Quarterly Bulletin of Cocoa Statistics Brazil Ecuador 161 143 32 60 45 55 45 Togo Dominican Republic 54 48 54 35 Papua New Guinea Peru Colombia 7
Cocoa grindings (demand) WORLD COCOA GRINDINGS 2011/12: 3.920 million tonnes Europe and Russia: 38% (1.495 million tonnes) Americas: 21% (840,000 tonnes) Africa: 18% (710,000 tonnes) Asia & Oceania 22% (870,000 tonnes) Source: ICCO, Quarterly Bulletin of Cocoa Statistics 8
Main cocoa processing countries 600 550 500 495 540 Top 12 cocoa processing countries (thousand tonnes) 450 400 350 300 250 430 361 399 439 387 401 297 305 265 243 239 Estimates for 2011/12 Estimates for 2010/11 215 230 200 190 150 140 150 100 85 80 78 83 86 87 50 0 Netherlands Côte d'ivoire Germany United States Malaysia Indonesia Source: ICCO, Quarterly Bulletin of Cocoa Statistics Brazil Ghana France Singapore Spain United Kingdom 9
Historical cocoa supply & demand 4,500 4,000 3,500 3,000 2,500 2,000 Net production Grindings 1,500 1,000 1960/61 1965/66 1970/71 1975/76 1980/81 1985/86 1990/91 1995/96 2000/01 2005/06 2010/11 Source: ICCO, Quarterly Bulletin of Cocoa Statistics 10 Thousand tonnes
Supply, demand and prices Market fundamentals (characterized stocks-to-grindings ratio) explain 83% of annual changes in cocoa prices in the long term. A 10% increase in stock-to-grindings ratio leads to a 9.1% decline in cocoa prices. A 10% increase in farmer prices leads to an increase in world supply of about 0.6% in the current crop year. if this price increase is sustained over time, the cumulative impact on world supply would be 8.7%. A 10% increase in cocoa prices leads to a decline of 1.1% only in consumption. A 10% increase in consumers disposable income leads to an increase in consumption of about 10%. 11
The cocoa supply & demand factors $16,000 $14,000 18 July 1977: max about US$18,000 80.0% 70.0% $12,000 $10,000 US$ per tonne Ratio (%) 60.0% 50.0% $8,000 40.0% $6,000 $4,000 $2,000 24 Nov 2000: min about US$1,000 Now about US$2,500 30.0% 20.0% 10.0% $0 0.0% 1971/72 1974/75 1977/78 1980/81 1983/84 1986/87 1989/90 1992/93 1995/96 1998/99 2001/02 2004/05 2007/08 2010/11 Stock-to-grindings ratio (right scale) ICCO daily price - US$ per tonne (current terms) ICCO daily price - US$ per tonne (constant 2011/12 terms) 12
Historical cocoa supply & demand World Cocoa Bean Production, Grindings and Surplus/Deficits 4500 700 Production / Grindings (thousand tonnes) 4250 4000 3750 3500 3250 3000 2750 2500 2250 2000 1750 1500 1250 600 500 400 300 200 100 0-100 -200 Surplus/deficit (thousand tonnes) 1000 1990/91 1992/93 1994/95 1996/97 1998/99 2000/01 2002/03 2004/05 2006/07 2008/09 2010/11-300 Surplus/Deficit Net Production Grindings 13 Source: ICCO, Quarterly Bulletin of Cocoa Statistics
What if a scenario without the economic crisis World Cocoa Bean Production, Grindings and Surplus/Deficits 4500 700 4250 600 Production / Grindings (thousand tonnes) 4000 3750 3500 3250 3000 2750 2500 2250 2000 1750 1500 1250 500 400 300 200 100 0-100 -200-300 -400 Surplus/deficit (thousand tonnes) 1000 1990/91 1992/93 1994/95 1996/97 1998/99 2000/01 2002/03 2004/05 2006/07 2008/09 2010/11-500 Surplus/Deficit Net Production Grindings 14
2015/2016 2016/2017 4800 4600 4400 4200 4000 3800 3600 3400 3200 Forecasts for Supply and Demand 15 2014/2015 Net production Grindings 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 2006/2007 (thousand tonnes)
Merci 16