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In: Business and Management

Submitted By lxy130
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Pages 3
Outlook
While the outlook for continued demand growth of cocoa looks positive, the longer term prospects for sustainable production to meet this demand are tenuous and many chocolate manufacturers are becoming concerned. Supply shortages and high prices are a long-term threat to future growth of cocoa consumption since rationing of stocks will affect the most price sensitive markets first which are also the emerging markets. Subsequent establishment of consumer patterns of increased consumption of alternative snack foods and the use of less, or lower quality, cocoa in chocolate products could seriously effect long-term consumption of cocoa in these markets.

Despite historically sustained growth, forecasting cocoa supply, demand and price movements is very difficult. However, as expected prices rose in 2001 due to a tightening of supply. Recent outlooks point to a demand growth range of 1.5-4.0% per annum. The current (November 2005) price is about US$1,400 per tonne. The long term outlook is for a price of US$1,200-2,000 per tonne in 2009-10 depending on demand growth

Critical factors for an Australian industry

Researchers and industry have been interested in cocoa production in northern Australia since the 1960s. A number of reviews were conducted showing there were suitable areas for commercial production and limited trials demonstrated that promising yields were possible. However, a combination of fluctuating world prices and the traditionally labour intensive nature of production have prevented any industry development. In 1999 a project to investigate the feasibility for cocoa in northern Australia was commenced in response to interest and backing from Cadbury-Schweppes Australia.

Any significant Australian cocoa industry would need to compete on the basis of world pricing given our current full import regime and the absence of any large-scale…...

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