The strength in Asia’s cocoa processing volumes likely reflects an increased appetite for premium chocolate in the West, rather than just demand growth in the region itself, Marex Spectron said, after quarterly grind data.
Asia on Friday finished up the round of regional cocoa grind data for the July-to-September period with a figure of 225,356 tonnes, a rise of 14.7% year on year.
The record grind - which was higher than market forecasts, with Marex itself having expected a 10% figure - reflects the “continuing strong demand for cocoa products in Asia”, said the Cocoa Association of Asia, which compiles the data from processors in Indonesia, Malaysia and Singapore.
However, there is more to the performance than that, said Jonathan Parkman, joint head of agriculture at Marex, saying that “most processing products from that region are actually sent to Europe, the US”, where it looks like demand for higher-cocoa-content foods is fuelling demand.
Choice of origin
Indeed, the surge in Asian grinding dovetails with a weaker-than-expected figure late on Thursday on North American volumes, reported down 7.4% year on year at 119,004 tonnes, to support ideas of more US supplies being sourced from abroad.
In fact, cumulative North American cocoa grind volumes for the first nine months of 2019, at 363,864 tonnes, are the lowest for that period in seven years.
“Many of these groups have operations around the world,” allowing choice in the sourcing of processing products, Mr Parkman said.
Combined data from Asia and North America - as well as Europe, where industry data earlier this week showed a third-quarter grind flat at 362,940 tonnes – offered a more rounded picture of world consumption overall.
At more than 700,000 tonnes, the combined figure is up 2.8% year on year, growth which represents a “pretty solid performance,” Mr Parkman told Agrimoney.
“It is certainly more than the market through it was going to be if you look back to this time last year.”
It is also faster than expansion in chocolate markets implying that - given that “no one is suggesting that stocks of semi-finished products are getting larger” – the cocoa content in what is being sold is rising.
The question this posed was whether this expansion was down to the big chocolate groups selling higher cocoa content ranges, or increased demand for artisan products, with an inherently higher cocoa concentration, Mr Parkman said.
“I think it is about the artisans."