A dimming global economic outlook means that consumers are looking for ways to cut spending, and cocoa demand in 2015 will grow at the weakest pace in six years, Rabobank International predicts. At stake is the $114 billion that Euromonitor Plc estimates will be spent globally on the sweet treat this year.
Slowing consumption comes after record buying helped propel three straight years of gains for cocoa futures. Higher ingredient costs prompted Hershey Co. and Mondelez International Inc., the maker of Oreo cookies, to raise prices. The rally encouraged more output, and now demand is easing just after farmers gathered a record crop in Ivory Coast, the world’s top producer. Cocoa-bean processing fell in Asia, Europe and North America in the fourth quarter, the peak season for sales, industry reports showed last month.
“Chocolate is one of those things that becomes a luxury in tough times,” said Sameer Samana, a global strategist at Wells Fargo Investment Institute in St. Louis, which oversees $1.6 trillion. “Chocoholics are realizing chocolate may be more of a want than a need. Once again, it seems that the world has plenty of cocoa, and that supplies won’t be put into jeopardy.”
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