BDSI warning over cocoa grinding volumes amid ongoing energy crisis
Gas pipeline Gazelle. One part of Nord Stream pipeline from Russia to European Union. Pic: Shutterstock
Germany’s BDSI confectionery trade association has confirmed that cocoa grinding levels have reduced by 4.7% to 103,532 tonnes in third quarter of 2022, as market conditions remain considerably challenging, reports Neill Barston.
The latest figures are set against results from the European Cocoa Association, which has reported 369,679 tonnes of raw cocoa were processed during the period, down 1.6% at the same point in 2021, with the sector facing major hardship amid 400% energy prices rises placing key strain on the industry.
Significantly, cocoa processing downturns in Germany come amid key political tensions with Russia, as Germany has not certified a new Nord Stream 2 pipeline of gas from Russia as a response to its ongoing war instigated against Ukraine. The original Nord Stream 1 supplies (as well as the new line) have recently been badly damage in what is being investigated by global authorities as an ‘act of gross sabotage.’
Consequently, Norway, which is reportedly Europe’s second biggest gas supplier, is said to have increased its production volumes significantly in a bid to end a reliance on Russian supplies by 2027.
As previously reported, according to the BDSI, this is having a major impact right across the sector, with companies now facing liquidity problems, with predominantly medium-sized manufacturers in the confectionery field hit hard to the point of companies potentially going out of business.
Placed in context, the organisation said that compared to August 2021, the exchange prices for electricity and gas have increased tenfold. The procurement prices for companies have reportedly more than doubled for vegetable oils and fats, for butter, sugar or glucose.
In terms of cocoa prices, Ghana and Ivory Coast governments remain notably concerned that a considerable period of fluctuation in market values has impacted on farming communities ability to earn a living income – which they say must be addressed as a priority to ensure the future viability of the market.
It has also reportedly emerged that there are further key issues within the key cocoa market of Ivory Coast, and although the harvest season is now under way, heavy rains said to have prevented crops from reaching port. According to reported figures from the Ivory Coast government, 106,144 million tonnes reached its export port destination – which was down 43% from the same period last year.
Furthermore, significant pressures on fertilser availability across Ghana and Ivory Coast is also impacting on crop yields across the two nations, with farmers reporting they are unable to manage increases in prices – directly impacting on the quality of their harvests.