Analysts of the Swiss-based Barry Callebaut, one of the leading confectionery companies in the world, have made a forecast for the new financial year, which began on Sep 1st 2010. According to their estimations, over the short term the market of chocolate is expected to demonstrate slight but steady growth – not more than 1-2% against the mid-term and long-term forecasts of 2-3%.
The Barry Callebaut experts consider that the reason for such a situation is the slow pace of the global economic recovery after the crisis. Various forecasts for the perspectives of the chocolate market are something between moderate and optimistic: the economic growth in the industry is inevitable but it will be different in various part of the world.
First of all, it should be mentioned that the industry faces the problem of raw material supply. The prices on the raw materials needed to produce chocolate will remain volatile as it was last year, the analysts say. Yet the level will be higher than the historical average. The major problem is supplying the cocoa market: in october2009 the prices made a rapid upswing after the announcement of poor yield of cocoa beans and consequently the reduction of supplies from Côte d'Ivoire, which is the biggest supplier of cocoa beans for the chocolate industry (over 40% of the global supply). The market instantly reacted with the growth of demand for cocoa and record-breaking prices: in early June 2010 the prices grew 150% as compared to 2008, in July at London Stock Exchange (LSE) the price reached a historical 33-year high.
Besides, at the 1st half of the 2009/2010 financial year the prices on dried milk grew as well, consolidating at a fairly high level.
The Barry Callebaut analysts report that in general until April 2010 the global market of chocolate experienced stagnation while losing trading volumes. Then some regions started showing uneven dynamics of growth:
China and the US showed a fairly high increase (8,2% and2,7%) while the European markets lagged behind (only a 0.9% increase in Western Europe, and a 5.3%decline in Eastern Europe).
The overall market index indicates 0.3% growth against predicted 2-3%.
At the same time, according to the annual financial report released by Barry Callebaut, the personal sales of the company over the 2009/2010 financial year increased 7.6%, making up the net profit of 10.9%.
Experts from Masterforex-V Academy remind you that in the light of the recent statement made by the president of Venezuela about an intention to make cocoa the main strategic product (it is planned to increase the production from 20 to 30 thousand tons in 2012, with a further increase up to 60K by 2019) the prices on cocoa around the world well may go down at the expense of increasing the world reserves of the product. Consequently, in the long-term perspective it is also possible to expect growth at the market of chocolate.
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