With Christmas just gone and Valentine’s Day and Easter approaching, demand for chocolate is high. Despite the ongoing global struggle with the Omicron variant of coronavirus, consumer demand for chocolate remains strong.
According to research by the IRI, retail chocolate sales rose in excess of 5% a quarter among Americans in particular.
Meanwhile, the largest global supplier of cocoa, Côte d’Ivoire, is currently exporting fewer beans, and that has tightened supplies. An increase in demand coupled with a reduced supply could push the price of cocoa into bull territory in the near term.
This upturn for cocoa could see it bounce back from its position last year, where it was one of the worst-performing commodities. Interestingly, the oversupply that hurt the industry in the previous year is currently helping it to dodge inflationary pressures and remain relatively cheap. This helps chocolate buyers, but not the cocoa production countries or the farmers.
With less cocoa being exported, buyers are instead relying on chocolate reserves to fulfil their demands. U.S. stockpiles have fallen for the past 17 weeks, bringing the total reserves down 20% when compared to the previous year’s peak.
At the same time, grindings in Côte d’Ivoire were up 1.7% in December, indicating a rise in demand, while their ports saw 4.7% fewer beans arriving between October 1st and January 9th.
Both the chocolate and non-chocolate sectors recorded increases in unit and volume sales, demonstrating that consumer demand is robust.
Anne-Marie Roerink, market analyst for 210 Analytics LLC
Roerink believes, however, that inflation has played a significant role in the comeback. Looking forward, she also mentioned that the accelerated gains seen towards the end of 2021 indicate a strong first quarter to come in 2022.
While the rise in chocolate consumption is expected during the current high-demand season, the increase could also be in part due to the mitigation of the coronavirus pandemic. Apparently, a significant proportion of chocolate is purchased while travelling, therefore relaxing travel restrictions could account for some of the extra demand.
