Sun, Oct 07, 2018 - Page 14 News List

Russia’s love of chocolate tightens world cocoa market

Bloomberg

Russia’s fast-growing appetite for chocolate is helping boost global cocoa demand, Barry Callebaut AG said.

Chocolate consumption in the world’s second-biggest market for the candy expanded almost four times the global rate in the nine months through April, the Zurich, Switzerland-based processor said.

That comes as robust demand is expected to push the cocoa market move into a slight deficit after two years of oversupply.

While Russia has long been the No. 2 chocolate confectionery market, after the US, demand last year started to pick up after the ruble stabilized.

That stopped the increase in retail prices and allowed Russians to resume buying more expensive foods or treats, said Elizaveta Nikitina, executive director of the Confectionery Market Research Center in Moscow.

“We expect the chocolate market to continue to grow in Russia,” Massimo Garavaglia, Barry Callebaut’s president for Europe, the Middle East and Africa, said in an interview. “This is definitely increasing the demand for cocoa beans in the world.”

In Russia, much like the rest of the world, producers are expanding the use of chocolate flavor in pastry, ice cream and dairy products, Garavaglia said.

In a bid to make candy bars more appealing, companies, including Nestle SA, are turning to new flavors or gimmicks to attract people who are increasingly shunning sugary products for healthier treats.

The cocoa market is set to tighten, after two years of bumper crops led to global surpluses that kept prices under pressure.

The market will probably be in a slight shortage of 50,000 tonnes in the season that just started, according to a Bloomberg survey of traders, brokers, analysts and exporters.

Cocoa futures on Friday rose 1.74 percent to US$2,042 per tonne, down 0.7 percent for the week.

Barry Callebaut, the world’s biggest chocolate maker, on Thursday said it agreed to buy Moscow-based Inforum to expand in the Russian market.

Chocolate consumption in the country rose 9.2 percent in the nine months through April, compared with a global increase of 2.5 percent, Barry Callebaut said, citing data from researcher Nielsen.

COAL

The biggest coal producer in the EU plans to boost output of the dirty fuel by about 10 percent in the next several years to cut down on imports, which are set to jump to a record this year, the Polish government said.

The country, which saw its thermal coal output slumping 7 percent to 53 million tonnes last year and pledged to fight smog, should raise output by 5 million tonnes to 6 million tonnes by the middle of the next decade, Polish Deputy Minister of Energy Grzegorz Tobiszowski said on Thursday.

Imports, mostly from Russia, are expected to increase to a record 17 million tonnes this year from 13.3 million tonnes last year, state-run trader Weglokoks SA said.

“High import means there’s a big market for coal in Poland,” Tobiszowski told reporters in parliament. “Import is important, but we want to replace part of it, as current levels are worrisome.”

While Poland seeks to make good on a promise to add more renewables, gas-fired and nuclear power capacity in, developing unstable energy sources is not possible without forging an an“alliance” with coal, which would always remain a backup, he said.

Other commodities:

‧Spot gold on Friday settled at US$1202.83 an ounce, up 0.8 percent from last week’s US$1,193.

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