Olam forecasts smaller cocoa surplus as Asia develops a taste for chocolate


27 Nov 2017 --- Cocoa processor Olam is projecting a smaller than expected cocoa surplus where excess supplies, that hit record levels last season, are falling because of a larger uptake from emerging Asian markets.

Head of cocoa at Olam International Ltd, Gerry Manley, spoke to Bloomberg recently explaining how an increase in cocoa demand from countries like the Philippines, Indonesia, India and China is leading to a decline in the cocoa surplus that was the hallmark of last season. 

These countries are using more cocoa powder in products such as ice-cream and cookies. 

Another factor that will impact global cocoa production comes from West Africa where growers are expecting a bumper crop for a second consecutive year in places like Ghana and Nigeria. 

And in the Ivory Coast – the world’s largest cocoa producer and exporter supplying around 33 percent globally – the West African nation has already produced 1.8 million tons so far in 2017 and is expected to increase volumes by the year-end. But production is unlikely to reach record crop volumes of last year which heavily contributed to a global surplus. 

The high production levels coming out of Africa last season pushed up the global surplus to 371,000 tons, according to the International Cocoa Organization. 

Manley says how the unusually good weather will likely ensure a large crop of 1.9 million to 1.95 million tons in Ivory Coast this season, while output will fall in Ecuador, Peru and the hurricane-hit Dominican Republic. 

“We are very positive on demand,” Manley told Bloomberg. “We are seeing good demand for cocoa powder across the world, but mainly emerging markets are in a leading position there.”

Manley said that global cocoa processing will likely increase by at least three percent, while the confectionery sector saw approximately 8,000 new products launched last year. He also said how trends like online shopping and the uptick in artisan shops and bakeries using cocoa will also impact on numbers. 

Olam looking to capitalize 
As the global demand for cocoa is increasing, the Singapore-headquartered company is increasing its capacity to mill cocoa cake into powder in Asia, according to Bloomberg. Manley also explained how a new milling facility is planned close to Chicago which is likely to be commissioned shortly. 

“There is a lot of cocoa which is available today that’s not of the quality that we can put through our processing factories nor can chocolate industries use,” Manley continued. “What we have seen, and it follows on from the El Nino year, is a destruction in quality and a reduction in fat content in beans, an increase in free-fatty-acid levels, which have served to deteriorate much of the cocoa that’s today in the surplus figures.”

“We’ve had extremely good weather, otherwise this could have equally been a deficit year,” Manley said. “We do believe low prices will curtail production and we do believe there’s only so much further that Ivory Coast can grow,” he added. 

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Olam Cocoa


A leading originator of cocoa beans, a globally leading cocoa processor, and the world’s foremost focused supplier of cocoa beans and cocoa products (cocoa powder, cocoa butter and cocoa mass), Olam Cocoa is a fully integrated cocoa business.

Cocoa beans are sourced from all major origins across Africa, Asia and South America, and Olam Cocoa’s portfolio of respected brands is spearheaded by deZaan, with its heritage of more than 100 years of excellence, as well as African origin brand Unicao, South American origin brand Joanes, the well-established Macao cocoa powders and Britannia confectionery and speciality fats brands, and the recently launched Huysman cocoa powder brand. Olam Cocoa has processing, refining and milling presence in the main cocoa producing countries, as well as in, or adjacent to, primary consumption markets in Europe, the Americas, and Asia.

Alongside a substantial operational infrastructure, Olam Cocoa recognises the clear responsibility to operate sustainably, Grow Responsibly and drive change by Re-imagining Agriculture. As one of the world’s leading suppliers of sustainable cocoa, Olam Cocoa is accelerating progress towards the goal of 100% traceable and sustainable cocoa volumes from its direct supply chain by 2020. 

The deZaan product range is organised around the three key elements of consistency, quality and functionality (flavour, colour and performance in application) and the three ingredient categories of cocoa powders, cocoa masses and cocoa butters. These are available in a wide range of technically specific formulations that cover the entire spectrum of application possibilities, from dairy and bakery to beverages, ice cream, cereals and high-end chocolates. D11BK is the ideal black cocoa powder for perfectly balanced recipes. This is the first ever nib alkalised black cocoa powder that provides superior sensory properties and colour impact without any added sodium. D11BK offers the option for a substantial sodium reduction in recipes and the ability to produce health conscious products that support permissible indulgence trends in categories ranging from biscuits and muffins, to cereals, desserts and ice creams.

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