Results for cocoa beans processed and converted into various chocolate products during Q1 are starting to be reported. Cocoa processors across Europe reported a total of 373,498 MT of beans consumed during Q1 2022, 4.4 percent above the prior year. The results reported also set a record for bean use in Europe in the first quarter of any year.

The results are an impressive start to the calendar year and follow last year’s robust 6.1 percent growth across the European region. The most recent quarter follows an equally impressive 6.3 percent gain witnessed in Q4 2021. Technically, for the crop year to date (October 2021 to March 2022) grind across Western Europe, is up 5.3 percent, incredibly strong when you consider that Europe is by far the largest chocolate consuming and reporting region of the world. Clearly, demand for cocoa products is strong, fueling heavy use of beans by European manufacturers and setting the stage for another big year for reported consumption.

Although overshadowed by the strong gains seen across Europe, Malaysia also reported its results for Q1 beans consumed at 90,424 MT, up 7.7 vs. Q1 2021 grind of 83,990 MT of beans. Although consolidated results will not be reported for Asia until next week, the large hike for Malaysia is likely an early indicator of growth for the region, including Indonesian-based processors. Like the European numbers, Malaysia’s results also set a new Q1 record.

Thus, the market will need to reconcile the balance sheet for 2021/22 with a high probability of smaller crops vs. last year and robust grinds that have not only recovered to pre-pandemic levels but also seem poised to register a second straight year of solid demand, all driving a growing deficit. Of course, these fundamentals are supportive in nature and should be construed as bullish factors, supporting prices in the months ahead.

European quarterly cocoa grind, YOY growth


Source: ECA, McKeany-Flavell
Posted by: Information Services
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