Cocoa

Price Trends – Production – Forecasts

4th Quarter 2014

Report code: 4WCT10

Xerfi Global Commodity Trends

 Contents
Key data 3 Production and usage (2) 7
● Forecast summary ● World Consumption (food)
● World cocoa production and consumption
● World production - consumption (food)

Price forecasts (1) 4

● $ per tonne
● Year on year change Production and usage (3) 8
● Real and nominal data ● Data table

Price forecasts (2) 5 Regional data 9

● Data table
Production and usage (1)
● World cocoa production
● World cocoa production (% change)
● World cocoa production (long period)
● Cocoa production: major producing countries
● Consumption : major consuming countries
● Main importers of cocoa
● Main exporters of cocoa
● Cocoa production by geographical area in 2013
6

Cocoa – Xerfi Global Commodity Trends – 4th Quarter 2014 2

 Key data

Price (Spot, New-York) 40%

Unit: annual average change, %
30%
Worl d production fel l nea rl y 4% i n 2013, owi ng to drops i n production i n
Ivory Coa s t a nd Gha na , whi ch a re the top-two produci ng countri es a nd 20%
a ccount for more tha n a ha l f of worl d output. Al though production i s s et
10%
to bounce ba ck i n 2014 (+6% i n our es tima tes ), the worl d ma rket i s
hea ded for a new production defi ci t a nd a further drop i n s tocks , wi th 0%
s trong upwa rd pres s ure on worl d pri ces . Over the l a s t deca de, growi ng
i ncome per ca pi ta i n the emergi ng economi es ha s res ul ted i n hi gher -10%
dema nd for chocol a te products i n thes e countri es , whi l e i n the
-20%
i ndus tri a l i s ed countri es cons umption ha s moved towa rd chocol a te wi th
a hi gher cocoa content. As a cons equence, the gl oba l s uppl y of cocoa -30%
ha s not kept up wi th dema nd duri ng the pa s t deca de, except i n 2011-
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2012, when production s ubs tantia l l y outwei ghed cons umption.

2008 2009 2010 2011 2012 2013 2014 2015

Production (thsd tonnes)
Worl d cocoa production 3,737 3,592 3,634 4,309 4,085 3,929 4,162 4,100
% change -3.9% 1.2% 18.6% -5.2% -3.8% 5.9% -1.5%
Consumption (thsd tonnes)
Worl d Cons umption (food) 3,775 3,537 3,737 3,938 3,957 4,083 4,195 4,300
% cha nge -6.3% 5.7% 5.4% 0.5% 3.2% 2.7% 2.5%
Cocoa production - cons umption (food) -38 55 -103 371 128 -154 -33 -200
Stocks (thsd tonnes, end of season)
Worl d s tocks 1,538 1,557 1,418 1,746 1,833 1,640 1,565 1,365
Prices ($/t)
Cocoa 2,557 2,794 2,947 2,924 2,347 2,403 3,033 3,104
% cha nge 9.3% 5.5% -0.8% -19.7% 2.4% 26.2% 2.3%

Sources : World Bank, United Nations Commodity Trade, Food and Agricultural Organization of United Nations, ICCO, Xerfi Global forecasts
Cocoa data (except for prices) are on October-September years through: 2014 stands for October 2013 / September 2014

Cocoa – Xerfi Global Commodity Trends – 4th Quarter 2014 3

 Price forecasts (1)

Price 3,500
Unit: $/t
3,000
2,500
Cocoa pri ces os ci l l a ted between 900 a nd 1,600 USD/t from 1990 to 2001
a nd ha ve proved s trong ever s i nce, s oa ri ng a t a very fa s t pa ce i n 2007 2,000
a nd 2008. Si nce 2009, pri ces ha ve os ci l l a ted a t very hi gh l evel s . After 1,500
pea ki ng a t a new a l l time record i n Februa ry 2011 (a t 3,448 USD/t), pri ces 1,000
fi na l l y s ubs i ded a nd fel l s ha rpl y i n 2011. Si nce 2013, worl d pri ces ha ve 500
fol l owed a n upwa rd trend a ga i n, i n the context of a n i ncrea s i ng 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
production defi ci t due to production s hortages i n Wes t Afri ca .

Price 80%
Unit : year on year 3 month moving average change (%) 60%
40%
Ri s i ng dema nd, s pecul a tion a nd tight s uppl y a ccount for much of the 20%
doubl e-di gi t growth ra tes of cocoa pri ces obs erved between 2007 a nd 0%
the s econd qua rter of 2008. Unl i ke other commodi ties , cocoa pri ces di d -20%
not col l a ps e i n 2009 a nd a new s trong upwa rd trend s tarted a t the end -40%
of 2009. After bei ng nega tive for a l a rge pa rt of 2011-2012, yea r-on-yea r -60%
i nfl a tion ha s turned pos i tive a ga i n s i nce mi d-2013 a nd thi s trend ha s Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
continued throughout 2014, due to a further decrea s e i n worl d s tocks .

Nominal price 500

Nominal price Real price
Unit: 100 = 2000
400

The pri ce of cocoa ha s been mul tipl i ed by a l mos t four a t current pri ces 300
a nd by 2.8 i n rea l terms (i .e. taki ng i nto a ccount i nfl a tion) s i nce 2000.
However, one mus t note tha t i t a tta i ned a hi s tori ca l mi ni mum i n 2000. 200
After pea ki ng a t a hi s tori ca l record i n 2010, i t dropped i n 2011-2012, i n
100
the context of s l owi ng dema nd for chocol a te products i n i ndus tri a l i s ed
countri es a nd growi ng production ca pa ci ties i n the producer countri es . A 0
new upwa rd trend s tarted i n 2013 a nd ha s ga i ned momentum i n 2014. 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

Cocoa – Xerfi Global Commodity Trends – 4th Quarter 2014 4

 Price forecasts (2)

Spot pri ce Qua terl y cha nge, % YoY cha nge % Spot pri ce Qua terl y cha nge, % YoY cha nge %
03-04 1,528 03-10 3,086 -5.3% 20.6%
06-04 1,371 -10.3% 06-10 2,986 -3.2% 19.6%
09-04 1,552 13.2% 09-10 2,861 -4.2% -0.1%
12-04 1,565 0.9% 12-10 2,855 -0.2% -12.4%
03-05 1,604 2.5% 5.0% 03-11 3,303 15.7% 7.0%
06-05 1,479 -7.8% 7.9% 06-11 3,044 -7.8% 1.9%
09-05 1,405 -5.1% -9.5% 09-11 2,968 -2.5% 3.7%
12-05 1,406 0.1% -10.2% 12-11 2,382 -19.8% -16.6%
03-06 1,489 5.9% -7.2% 03-12 2,306 -3.2% -30.2%
06-06 1,500 0.8% 1.4% 06-12 2,217 -3.9% -27.2%
09-06 1,512 0.8% 7.7% 09-12 2,444 10.2% -17.7%
12-06 1,508 -0.3% 7.3% 12-12 2,422 -0.9% 1.7%
03-07 1,720 14.1% 15.5% 03-13 2,174 -10.3% -5.7%
06-07 1,904 10.7% 26.9% 06-13 2,278 4.8% 2.7%
09-07 1,937 1.7% 28.1% 09-13 2,425 6.5% -0.8%
12-07 1,972 1.8% 30.8% 12-13 2,735 12.8% 12.9%
03-08 2,416 22.5% 40.5% 03-14 2,882 5.4% 32.6%
06-08 2,770 14.7% 45.5% 06-14 3,004 4.3% 31.9%
09-08 2,789 0.7% 44.0% 09-14 3,181 5.9% 31.2%
12-08 2,252 -19.3% 14.2% 12-14 3,066 -3.6% 12.1%
03-09 2,559 13.7% 5.9% 03-15 3,081 0.5% 6.9%
06-09 2,497 -2.4% -9.9% 06-15 3,096 0.5% 3.1%
09-09 2,864 14.7% 2.7% 09-15 3,111 0.5% -2.2%
12-09 3,258 13.8% 44.7% 12-15 3,126 0.5% 2.0%
Sources: Xerfi Global forecasts, INSEE, Feri, latest figures Q3 2014

Cocoa – Xerfi Global Commodity Trends – 4th Quarter 2014 5

 Production and usage (1)

World cocoa production 5,000

Unit: thousand tonnes
4,000
World cocoa production increased by 17% between 2004 and 2014 (year ended in 3,000
September 2014), in a context of rising demand for cocoa-based food, resulting in
2,000
increasing demand for cocoa powder. Mostly grown in tropical countries such as
Ivory Coast, Ghana, Nigeria and Indonesia, cocoa production has been rather 1,000
unstable since 2007, alternating years of strong and poor production. After a strong
hike in 2011, world output dropped in 2012-2013, due to a decrease in fertiliser 0
usage in Ivory Coast and Ghana, which reduced yields and production. 04 05 06 07 08 09 10 11 12 13 14 15

World cocoa production (% change) 20%

Unit: %, change
10%
Worl d cocoa production ha s been fa i rl y fl uctua ting over the cours e of
the l a s t ten yea rs mos tly due to cl i ma tic fa ctors . After a s tagna tion i n 0%
2010, worl d output bounced ba ck s trongl y i n 2011, tha nks to a record
ha rves t i n Gha na due to exceptiona l wea ther condi tions (a nd des pi te -10%
pol i tica l i ns tabi l i ty i n Ivory Coa s t). Worl d output fel l for two yea rs i n a
row i n 2012-2013, due to ba d wea ther condi tions a cros s the Wes t Afri ca n
-20%
cocoa bel t a nd l ower yi el ds due to a drop i n fertil i s er us a ge i n Afri ca . 04 05 06 07 08 09 10 11 12 13 14 15

World cocoa production (long period) 5,000

Unit: thousand tonnes
4,000
3,000
Si nce the ea rl y 2000s , cocoa production growth ha s been dri ven by ri s i ng
dema nd for chocol a te confectionery a nd products contai ni ng cocoa 2,000
powder (s uch a s i ce crea m) i n the emergi ng ma rkets . The i ncrea s ed us e 1,000
of fertil i s ers a nd the i ntroduction of hi gher yi el d trees ha ve res ul ted i n
hi gher outputs until 2011, but thi s pos i tive trend revers ed i n 2012, a s a 0
drop i n worl d pri ce forced ma ny fa rmers to reduce the us e of fertil i s ers . 1985 1990 1995 2000 2005 2010 2015

Cocoa – Xerfi Global Commodity Trends – 4th Quarter 2014 6

 Production and usage (2)

World Consumption (food) 5,000

Unit: thousand tonnes
4,000
Worl d cocoa cons umption fel l by 6% i n 2009 i n the context of fa l l i ng 3,000
cons umer s pendi ng i n a dva nced economi es but the genera l upwa rd
2,000
trend obs erved between 2001 a nd 2008 res umed i n 2010-2011. In 2012
cons umption growth s l owed down s ha rpl y (+0.5%). Hi ghl y el a s tic to 1,000
i ncome, dema nd for chocol a te products wa s a ffected by s l owi ng GDP
growth a l l a cros s the worl d. However, cons umption ha s a ccel era ted
0
a ga i n s i nce 2013 a nd i s s et to rea ch 4.2 mi l l i on tons i n 2014. 04 05 06 07 08 09 10 11 12 13 14 15

World cocoa production and consumption 5,000

Unit: thousand tonnes Consumption (food) Production
4,000
3,000
Total output outpa ced cons umption i n 2011-2012, when the output
s urpl us wa s of nea rl y 500,000 tonnes over two yea rs . Thi s trend wa s 2,000
revers ed i n 2013 due to fa s ter growth i n cons umption tha n i n production 1,000
a nd a new production defi ci t wi l l be obs erved i n 2014, a ccordi ng to our
es tima tes . 0
04 05 06 07 08 09 10 11 12 13 14 15

World production - consumption (food) 600

Unit: thousand tonnes
400
Si nce 2000, worl d cons umption ha ve s i gni fi ca ntly outs tri pped production 200
onl y four times , i n 2001, 2007, 2010 a nd 2013, whi l e production s urpl us es
0
ha ve ra ther been the norm. The production s urpl us rea ched a record
l evel i n 2011, a t 374,000 tonnes , a ccounting for nea rl y 10% of worl d -200
production. It decrea s ed s ha rpl y i n 2012 (to 124,000 tonnes ) a nd turned
to a defi ci t i n 2013, a s production col l a ps ed whi l e cons umption kept
-400
i ncrea s i ng. A new defi ci t i s foreca s t i n 2014. 04 05 06 07 08 09 10 11 12 13 14 15

Cocoa – Xerfi Global Commodity Trends – 4th Quarter 2014 7

 Production and usage (3)
Cocoa
Worl d
Worl d cocoa production -
Cha nge Cha nge (%) Cons umption Cha nge Cha nge (%)
production cons umption
(food)
(food)
1986 2,079 1,954 125
1987 2,016 -64 -3.1% 2,020 66 3.4% -5
1988 2,519 504 25.0% 2,049 29 1.4% 470
1989 2,587 68 2.7% 2,273 224 10.9% 315
1990 2,487 -100 -3.9% 2,323 51 2.2% 164
1991 2,495 8 0.3% 2,453 130 5.6% 42
1992 2,636 141 5.6% 2,463 10 0.4% 172
1993 2,635 -1 0.0% 2,509 45 1.8% 126
1994 2,638 3 0.1% 2,596 87 3.5% 42
1995 2,958 320 12.1% 2,636 41 1.6% 321
1996 3,205 247 8.3% 2,853 216 8.2% 352
1997 2,971 -234 -7.3% 2,793 -60 -2.1% 178
1998 3,276 305 10.3% 2,917 125 4.5% 358
1999 2,934 -341 -10.4% 2,920 3 0.1% 14
2000 3,372 438 14.9% 3,141 221 7.6% 231
2001 2,865 -507 -15.0% 3,008 -133 -4.2% -143
2002 2,877 12 0.4% 2,886 -122 -4.0% -9
2003 3,179 302 10.5% 3,077 191 6.6% 102
2004 3,548 369 11.6% 3,237 160 5.2% 311
2005 3,378 -170 -4.8% 3,382 145 4.5% -4
2006 3,808 430 12.7% 3,522 140 4.1% 286
2007 3,430 -378 -9.9% 3,675 153 4.3% -245
2008 3,737 307 9.0% 3,775 100 2.7% -38
2009 3,592 -145 -3.9% 3,537 -238 -6.3% 55
2010 3,634 42 1.2% 3,737 200 5.7% -103
2011 4,309 675 18.6% 3,938 201 5.4% 371
2012 4,085 -224 -5.2% 3,957 19 0.5% 128
2013 3,929 -156 -3.8% 4,083 126 3.2% -154
2014 4,162 233 5.9% 4,195 112 2.7% -33
2015 4,100 -62 -1.5% 4,300 105 2.5% -200

Cocoa – Xerfi Global Commodity Trends – 4th Quarter 2014 8

 Regional data
Cocoa production: major producing countries
Unit: % of world production
Cameroon 5.7%
2013
Nigeria 5.7% 2005

Indonesia 10.7%

Ghana 21.2%

Ivory Coast 36.8%

0% 10% 20% 30% 40%

Consumption : major consuming countries Main exporters of cocoa

Unit: % of world consumption Unit: % of world exports
Malaysia 7.2% Indonesia 5.3%
2013 2012
Germany 9.8% 2005 Cameroon 5.4% 2007
USA 10.1% Nigeria 6.9%

Ivory Coast 11.6% Ghana 19.1%

Netherlands 13.1% Côte d'Ivoire 36.7%

0% 5% 10% 15% 0% 10% 20% 30% 40%

Main importers of cocoa Cocoa production by geographical area in 2013

Unit: % of world imports Unit : % of world production
France 6.5%
2012 America 16.2%
Germany 11.1% 2007
Malaysia 11.2% Asia & Oceania 12.1%
United States of America 13.5%

21.1% Africa 71.7%

Netherlands

0% 5% 10% 15% 20% 25% 0% 20% 40% 60% 80%

Cocoa – Xerfi Global Commodity Trends – 4th Quarter 2014 9