Cocoa Association of Asia offers optimism despite drop in sector grindings
The Cocoa Association of Asia (CAA) offered an upbeat assessment of the region’s market during its first online forum, as the sector continues to grapple with the coronavirus pandemic, writes Neill Barston
According to the trade body, which represents cocoa and chocolate enterprises, as well as connected supply chain operations, its latest virtual gathering of industry experts found the sector in resilient mood in spite of production volumes being impacted during 2020.
The CAA, which is based in Singapore, said that although cocoa grindings, which are of significant importance to the chocolate and wider confectionery industry, had reduced 10% against the same period in 2019, there was positivity in the market based on analysis of figures from the first half of the year. Figures showed that Q2 results were down 2.2% against the first quarter, with Q3 proving flat against the second period of 2020, which saw many markets enter covid lockdown measures.
As the organisation explained, considering the interruption to supply chains caused by the ongoing coronavirus pandemic, the reduced consumer footfall in the retail sector, and the COVID induced recession, its forum panel expressed confidence in the measures taken by actors across the Asian cocoa value chain to respond to the difficult circumstances of 2020.
The panel, whose contributors included Andrew Rawlings, associate analyst – Agri Commodities, RaboResearch, Francesca Kleemens, managing director from Cargill Cocoa & Chocolate Asia Pacific; Quek Ngee Chuan, vice president for the Cocoa Division at Olam International Ltd, Antoine Delsart, managing director of Touton Far East Pte, and Gerald Abwerzger; and chief executive Officer, Von Alm Pte Ltd, praised the manufacturing sector for innovation. It said there had been product types and formats that had responded to consumer concerns around healthier snacks, affordability, and sustainability.
In addition, the panel also highlighted that Asia’s young and increasingly growing middle-class population presented significant growth opportunities for the future. As the CAA noted, present demand in the region for chocolate and cocoa products remains low against Europe and the US, yet there was optimism that bespoke, affordable products would enable a strong recovery.
While the panel expressed confidence about the future of the Asia region cocoa value chain, (Asia currently imports 80% of the cocoa beans it processes, mostly from West Africa and also increasingly from Latin America) it was tempered with nearer term supply caution around the unsettled global environment.
Areas of concern included the US elections, Brexit transition and the ongoing covid crisis. Looking towards regional supply, the CAA added that this was mainly from Indonesia, which has now stabilised after several years of contraction, the panel emphasised the importance of raising both the quality and sustainability in the coming years.
The organisation added that the relative security of cocoa bean supplies matched by a mature consumer segment, there were hoping that demand would increase for confectionery and chocolate-based ranges within Asia.