Cocoa prices set to rise 4.5% a year until 2029, according to market forecasts
pic: Shutterstock
A fresh market study has forecast that the cocoa bean market is anticipated to rise by an annual rate of 4.5%, by an additional $3.58 billion by 2029, despite present global uncertainties, writes Neill Barston.
According to the industry report from the Technavio group, the projected rises in market value were attributed to demand across confectionery, pharma, as well as natural cosmetics sectors.
However, it noted that market volatility was a central factor behind, with the business using AI to analyse present conditions and buying patterns around the world from some of the largest groups in the industry, with its key players including Barry Callebaut, Cemoi, Cargill, Ecom and Mondelez.
Significantly, global supply deficits are also a major consideration, and as previously reported, the ICCO cocoa organisation’s estimates towards the end of 2024 covering the last two years of world production, grindings, and stocks of cocoa beans, revealed that volume supply has dropped 13% to 4.38 million tonnes globally in the past twelve months – which has kept prices high.
Its latest report comes as market prices have hit nominal value highs within the past two months, of $12,000 a tonne on Futures markets, which has led to considerable concern across the industry.
Retail impact
As reported by Confectionery Production, this has also filtered down to the retail sector, with many prices, including within the UK having been raised significantly in the past year alone, reflecting the higher cost of core cocoa ingredients.
The report stated: “The impact of hypertension and other health concerns has led to a rise in demand for dark chocolate variants, including brownies, mint flavour, vanilla flavour, and coffee flavour. Cocoa plants face challenges such as pests, dry weather, and weed accumulation, affecting yield and profitability. The supply dynamics of cocoa beans are influenced by factors like crop damage and the availability of cocoa butter, which is used as a lubricant, antioxidant, flavour enhancer, preservative, emulsifier, and humectant in various industries.
“The convenience of purchasing cocoa products through channels like brand outlets, direct selling, e-commerce portals, and value-added services, including free home delivery and cash-on-delivery options, is driving market growth.”
Barry Callebaut’s Cocoa Horizons scheme has been active in Ivory Coast for the past decade. Pic: Barry Callebaut
Furthermore, the study also noted that the cocoa powder segment, including alkelised forms, had also seen noted increases in demand across the sector.
Significantly, linked to its growth, the report also highlighted the fact there had been a rise in mergers and acquisitions, such as last April’s acquisition by Mondelez, of Ricoline, a key Mexican confectionery company, as the snacking group continues its quest to expand within the region.
While the report observed the clear potential for growth in the coming years, it also stated there were significant ongoing challenges.
As Confectionery Production has reported, the cocoa sector in Ghana and Ivory Coast, which still accounts for around two thirds of global supplies, has faced damaging crop blights from swollen shoot virus, and unfavourable climate conditions have also created further uncertainty.
The emergence of other potential lab-grown cocoa sources within the past two years, remains another issue that the sector is yet to fully grapple with in meeting global supply requirements.