BDSI expresses concern for cocoa industry over sharp decline in European grinding results

The Federal Association of the German Confectionery Industry (BDSI) has expressed concern at a sharp downturn in cocoa grinding serving the chocolate and confectionery industry, which has been badly affected by the coronavirus pandemic. Neill Barston reports.
As the organisation noted, official second quarter figures from the European Cocoa Organisation (ECA) had revealed that production volumes of cocoa had fallen significantly during the period.
The latest results showed that Europe-wide grind produced 314,108 tonnes of raw cocoa, equating to 8.9% compared to the same quarter of the previous year, placing notable pressure on worldwide markets.
There are presently 11 confectionery manufacturing companies in Germany that work directly from bean sourcing, which collectively ground a total of 78,885.2 tonnes of cocoa, which represented a decrease of 16.3% compared to the corresponding quarter of the previous year.
The sales channels that are important for many of these businesses, such as buying and department stores or confectionery stores remained closed for many weeks due to the coronavirus crisis.
As previously reported by Confectionery Production, research from BDSI revealed that 73% of manufacturers within the confectionery and snacks market category said that the current outlook for the rest of this year, would be more challenging than last year. Although ISM in Cologne went ahead at the end of January, just as the coronavirus pandemic was taking hold, many of the ranges displayed during the event have been impacted due to the enforced closures of retailing environments – which have now re-opened after months of inactivity.
The situation has caused particular concern for key cocoa producing nations including Ivory Coast and Ghana, which make up around two thirds of the market, with the latest figures from the International Cocoa Organisation placing the present price of cocoa in July at under $2,100 per tonne on global market prices, representing a notable drop on prices compared against rates over the past few years.
Plans to introduce a Living Income differential supplement of $400 per tonne proposed by Ghana and Ivory Coast government were proposed last year by the Ivory Coast, with the likes of Nestle confirming that it had already instituted the initiative, yet the downturn in prices are placing renewed pressures on farming communities – many of whom are presently earning below UN definitions of world poverty.
In terms of broader financial support, the Ghana Cocoa Board has recently stated that strong financial support for the sector still remains, with its chief executive Hon. Joseph Boahen Aidoo, confirming that its international financial partners are proceeding with annual loan support package totalling $1.3 billion.