* Need to ramp up cocoa output to 4 mln T, from 3 mln T now
* Global cocoa prices currently at $2,100 per tonne
By Michael Taylor
JAKARTA, March 26 Global cocoa prices could more
than double by 2020, rallying to a level last seen 36 years ago,
if production fails to catch up with demand, a director at
Singapore-based Petra Foods said on Tuesday.
Cocoa demand is forecast to exceed production by 45,000
tonnes in the season to September 2013, according to the
International Cocoa Organization, with grindings expected to
rise 1.5 percent to 4.01 million tonnes.
"We have mass market products. We cannot afford a cocoa
price of $5,000 a tonne. With that you will get boom and bust,
which is the worst scenario for everyone in the cocoa industry,"
said Marc Donaldson, Petra's director of cocoa sustainability.
Global output needs to hit at least 4 million tonnes by
2020, which is 1 million more than now, to prevent a spike in
cocoa prices, he said at the Asia Choco Congress in Jakarta.
Petra Foods was the world's third largest supplier of cocoa
ingredients before it sold its cocoa business to Swiss chocolate
maker Barry Callebaut in a deal announced in December.
Benchmark New York cocoa futures are currently
hovering around $2,100 a tonne, well below a 32-year high around
$3,800 struck in early 2011 and a peak of about $5,300 hit in
1977, according to Reuters data.
Prices may, however, soon get a boost as chocolate makers
will start replenishing cocoa bean stocks this year after eating
through a mountain of cocoa butter built up more than a year
ago, boosting demand for chocolate's main ingredient.
Rising global cocoa demand is linked to economic growth,
Donaldson said, adding that consumers in Asia are expected to
switch to chocolate products with higher cocoa powder content.
Even though the industry has spent more than $1.2 billion on
sustainability efforts over the last five years to boost output,
results have been far from satisfactory, said Donaldson.
But delegates at the cocoa gathering believe that
third-largest producer Indonesia could help fill the output gap,
even though the country's ambitious plan to boost production to
1 million tonnes by 2020 has suffered a setback after hundreds
of newly-planted trees died.
Indonesia's output could rise by 11 percent to as high as
500,000 tonnes in 2013 from last year due to better farming
techniques, although recent wet weather will delay harvests,
according to the Indonesian Cocoa Association.
Multinational firms such as Cargill and Barry
Callebaut, the world's top chocolate maker, have already built
grinding projects in Indonesia.
On next year's global supply prospects, Petra's Donaldson
said it was difficult to predict whether there will be a deficit
until results of Ivory Coast's mid-crop are known after May.
In Ivory Coast, the world's top cocoa producer, rainfall
diminished across the main cocoa growing regions last week, and
some growers were worried that extreme heat could hinder the
development of the April-to-September mid-crop.