Cocoa prices at record high but China’s demand for ‘gold beans’ rising despite struggling economy

Cocoa prices have reached record highs over the past one year but the demand has continues to be there in China.

The demand has remained strong despite the economic woes that China has faced lately.

In the July-September quarter, the economic growth in China slowed to 4.6 per cent from 4.7 per cent in the previous quarter. The annual growth is set to miss the modest target of 5 per cent growth. The growth is set to fall further next year. The World Bank has projected that China would grow at 4.8 per cent his year and 4.3 per cent in 2025.

The slowdown has, however, not affected China’s appetite for cocoa and chocolates it makes.

Record prices but Chinese continue to love cocoa

Since 2022, cocoa futures prices have increased significantly.

In April, the cocoa prices reached the record high of $12,000 per ton compared to $2,500 in December 2022, according to 36 Kr, an economy-focussed Chinese outlet.

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Even though the prices fell to around $7,000 per ton in between, the prices are now again over $10,000 per ton, as per the outlet.

However, the price rise has not affected the demand and enthusiasm of Chinese consumers.

The outlet reported that cocoa and cocoa-made products such as chocolates continue to remain popular. It cited data from e-commerce platform Douyin to reported that chocolate sales increased by 11.85 per cent year-on-year. It further reported that the increase in sales was across the board.

While domestic brands like Qiaoxiqi saw a surge in sales, Dubai chocolate became extremely popular, and boutique chocolate stores also witnessed a surge, according to the outlet.

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This is significant as cocoa is not just used in making chocolates but is used in a number of products and processes, such as in desserts, dairy products, and in the baking industry. The rising sales and consumption suggests that the economic woes are absent when it comes to cocoa.

China felt supply-chain pinch but imports still rose

Even as sales increased, China faced supply-chain issues related to cocoa.

The issues can be attributed to a number of reasons, ranging from climate change-induced poor production to overall low global cocoa production.

By August 2024, the International Cocoa Organization (ICCO) reported that cocoa deficit for the 2023-24 season reached 462,000 tons with an increase of 524 per cent compared to the 74,000-ton deficit in the previous cocoa cultivation season.

Climate change, tree diseases, and pests, combine with logistical issues to put pressure on cocoa supply chains.

However, despite supply chain issues and rising prices, the cocoa imports have increased in China, according to figures carried by 36 Kr.

The outlet reported that China’s total cocoa and cocoa-made products registered an annual growth of 1.05 per cent and reached 138,900 tons in September.

To maximise the businesses, Chinese players are resorting to ‘chocolate+’ strategy where they are producing and advertising non-chocolate products mixed with chocolates.