Cocoa futures prices rose amid soaring demand from Asia and Europe. Also, Asian cocoa butter exports are forecasted to jump.
At the time of writing, the price of cocoa futures for December delivery is trading higher by 0.65% to $2,383.50 per metric ton.
This bullish momentum is attributed to soaring demand led by growth in Asia and higher processing in Europe as travel and tourism resumed.
Analysts projected that cocoa bean processing in Asia could rise by around 900,000 tons this year. It is higher than the previous year’s record of 820,000, when supply chain woes and lower consumption related to the coronavirus pandemic slashed demand.
The executive director of International Cocoa Organization (ICCO) said that bean processing in Asia is higher than pre-pandemic levels. In Europe, it is back to the pre-coronavirus statistics.
On Thursday, ICCO forecasted a 230,000-ton global cocoa deficit in the current 2021/22 harvesting season, up from a former projection of a 174,000-ton deficit.
According to the Cocoa Association of Asia (CAA), the region’s second-quarter cocoa grind grew by 3.60% year-over-year to 228,895 tons.
Meanwhile, the Brussels-based European Cocoa Association said that Europe’s Q2 cocoa grind jumped by 2.00% on an annual basis to 364,081 tons.
Cocoa butter export in Asia to jump in 2022
Asia’s cocoa butter exports are anticipated to rise this year as higher grinding, lower freight rates, and loosening of supply chain woes boosted sales.
It is projected to grow by approximately 13.00% in 2021/22, from around 196,000 tons shipped a year ago, according to CAA chairman Alvin Lee.
The region, which consumes more cocoa powder, exports the commodity’s butter product to buyers mainly located in the United States and Europe.
Freight rates to ship cocoa from Asia to the US have plunged to roughly $10,000.00 to $12,000.00 per container. It declined from last year’s price of $22,000.00 to $23,000.00.
