Transparency Market Research

Cocoa Market - Rising Disposable Incomes in the Developing World Leading to Rising Demands for Cocoa Beans

Transparency Market Research Report Added "Cocoa Market" to its database.


Albany, NY -- (SBWIRE) -- 03/13/2015 -- The global market for cocoa is a highly sophisticated marketplace as far as the supply chain is considered. Cocoa, an important cash crop, makes for a critical entity of exports for producing countries as well as an important import for consuming countries, which have climatic conditions unsuitable for cocoa production. The global supply chain of cocoa beans includes farmers - the core producers, buyers, shipping companies, processing companies, manufacturers, chocolatiers, and distributers.

According to the International Cocoa Organization, the global value of cocoa beans sold in the financial year 2011-2012 was approximately US$10 billion, while the retail value of chocolate sales in 2012 was nearly US$107 billion. The top eight chocolate manufacturers of the world collectively achieved sales of nearly US$71,554 million in 2013.

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Cocoa Market - Steady Global Demand Driving Growth

The fact that cocoa trees are highly susceptible to insects, diseases, and even changing weather patterns makes cocoa cultivation a very tricky process. Unlike most commercially viable and highly successful industries, a vast majority of cocoa is produced by small, mostly family-run farms where outdated farming processes and limited organizational capabilities are a norm.

The global cocoa market possesses vast potential in leveraging the production to a much higher level. This, coupled with the fact that demand is steadily rising from across the globe, has encouraged a vast number of global efforts to support and improve the market's economic viability – especially for the farmers.

Global Cocoa Market - Increased Demands from Developing Nations Adding to the Thrust

An avid following of chocolate lovers from across the globe and the rising discretionary household incomes in countries from developing regions are the chief reasons leading to a stable growth of the global cocoa market over the past few years. Countries in Europe and North America have been amongst the largest consumers of cocoa ever since the market started flourishing in the 19th century. The World Cocoa Foundation states that the global demand for cocoa has increased at a CAGR of over 3% since 2008. With steady demands from mature markets such as America and Europe constituting the major share of these demands, rising demand from the growing middle classes of India, China, and Brazil have also emerged as the chief drivers for the market.

However, the market has consistently struggled to cope with some pressing issues, such as:

Low productivity
Declining soil fertility of chief producing countries
High susceptibility of cocoa plants to changing climate, weather, and environmental conditions
Outdated production facilities and poor farm organizational practices
Inefficient marketing
Lower adoption rate of innovations and technologically advanced farm equipment
Key Highlights and a Brief Factsheet

The demand for more cocoa from across the world is expected to increase at a stable growth rate in the coming years. However, the slowing supply is a major issue that the market will have to soon tackle to sustain the demand, which already outpaces the global supplies chain. A combination of many other factors has brought an ever-increasing pressure on cocoa and chocolate prices. Cocoa processing and grinding companies will soon start feeling the heat of the rising pressures of reducing supply and rising demand.

Some Important Facts about the Global Market for Cocoa:

The market is wealthy, but its core producers are not: small cocoa producers suffer from poor labor and long-standing underpayments. Cocoa producers earned a reported 16 percent share of the price of the price paid for chocolates in rich countries back in the 80s. Currently, this share of profits have now come down to as low as 6 percent.

Of the approximately 4 million tons of cocoa produced globally in the financial year 2013-14, nearly 40% was produced alone by Côte d'Ivoire (Ivory Coast), Africa.

The global cocoa market is highly unbalanced: nearly 60% of the total cocoa produced globally is consumed by the mature markets of America and Europe.

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