Cocoa grinding grows 0,82% and ends 2022 with 226.015 tons

The year 2022 closed with a volume of national almonds received of 205.782 tons, an increase of 4,1% compared to the 197.654 tons of the previous year, according to data compiled by SindiDados – Campos Consultores and released by the National Association of Industries Cocoa Processors (AIPC). In the month-to-month comparison, there was a decrease of 2,5% in December compared to that received in November, going from 17.959 tons to 17.498 tons. When comparing December 2022 with the same month in 2021, there was a growth of 10,1%, since in December 2021 the volume received was lower than that seen in 2022, with 15.889 tons. “The final numbers for 2022 are the consolidation of the efforts of the entire chain. The increase in the volume received confirms what we have been saying at AIPC for some time: Brazil is on track to soon achieve self-sufficiency in the production of cocoa beans.”, explains the executive president of AIPC, Anna Paula Losi.

Between January and December 2022, almond grinding was 226.015 tons, an increase of approximately 0,82% compared to 224.168 tons in the same previous period. In the comparison between November and December, the volume processed decreased by 0,08%, from 19.954 to 19.939 tons, which demonstrates important stability in the face of the economic and social challenges that the world has faced in the last three years. In comparison with December 2021, there was a growth of 4,3%, as the volume processed in the same month of the previous year was 19.103. “Grinding has grown in recent years, albeit at a slower speed than desired, due to the various challenges of recent years, not only in Brazil, but also around the world, such as the Covid-19 pandemic and the war between Russia and Ukraine. Even though some of these events happen very far from here, the impact is direct on the consumption of cocoa derivatives”, ponders Anna Paula.

In terms of almond imports, the year to date was 11.011 tons, compared to 59.768 tons imported between January and December 2021. Anna Paula states that “Once again, the reduction in imports is a direct reflection of the improvement in volumes delivered to the industry. As we have stated, the industry is moving towards self-sufficiency in almond production, thus reducing dependence on imported cocoa and also, consequently, reducing the import of derivatives”.

Exports of derivatives, which mainly serve the markets of the United States, Argentina and Chile, also fell year-to-date, going from 54.756 tons in 2021 to 47.915 tons this year; which means a drop of 12,5%.

Receipt by state

The reception of almonds by state was highlighted by the volume sent by Bahia, of 139.642 tons. In 2022, there was a decrease of approximately 0,9% compared to 140.928 tons in 2021. Next came Pará with 56.586 tons, a volume that grew 13,5% compared to 49.821 tons in the same period in 2021, followed by Espírito Santo with 7.635 tons compared to 5.261 tons, an increase of 45,4%; and Rondônia, with 1.523 tons, compared to 1.584 tons, a drop of 3,8%. In the comparison between November and December, the receipt of almonds was greater in two of the four states, with the exception of Bahia, which went from 14.569 tons to 13.599, and Rondônia, which went from 99 tons to 61. In any case, between the four main regions, Bahia continues to present the highest value of deliveries to industry.

International market analysis

According to StoneX analyst Caio Santos, the year 2022 began signaling a trend towards higher prices for the international cocoa benchmark, traded on the New York Stock Exchange. In January, crush data released by regional processing associations pointed to a strong start to demand in the 21/22 (Oct-Sep) season, as consumption at the end of the chain recovered with the gradual reopening of most countries after the COVID-19 pandemic.

Santos points out that the conflict between Russia and Ukraine and, later, the reacceleration of COVID-19 in China – which motivated the country to re-adopt the total lockdown strategy – contributed to holding back demand for another year. “The confluence of the above vectors meant that stock exchange prices remained in 2022 very close to the average observed in 2019,” he stated.

Santos also indicates that prices reached their maximum of 2790 $/t in February/22, driven by the more optimistic outlook regarding demand and the seasonal upward force that normally contribute to the increase in prices between December and February. In March/22, prices still remained relatively strong – oscillating between 2447 and 2694 $/t – with expectations of a reduction in the global supply of cocoa, especially in West Africa, due to the seasonal cycle of cocoa trees (in 20 /21 Ghana and Ivory Coast had recorded record production).

The analyst states that, from April/22 onwards, the downward trend dominated cocoa business on the stock exchange, causing it to record stable or negative closings until October/22. “Prices were losing strength in the face of the possibility that the strong acceleration in global inflation – driven by the energy crisis in Europe and the reopening of post-pandemic economies – could lead to a global economic slowdown”, he pointed out. According to him, interest rate hikes during this period, especially in the USA and Europe, exerted their influence to reinforce the downward pressure on cocoa, as well as other commodities.

Santos reports that, in the last quarter of 2022, after cocoa recorded the year's lows in September/22, at 2190 $/t, the prospect of reactivation of demand again, now in a context of lower stocks - which were consumed in 21/22 – rekindled the upward trend that contributed to the strengthening of cocoa prices between the end of 2021 and the beginning of 2022.

“For 2023, projections point to a context of recovery in production in Ghana and Ivory Coast, but also to an acceleration in international demand – driven at this time by the economic reopening of China,” he said. He states that this is a scenario with the potential to result in the maintenance of a deficit of between 80-100 thousand tons for this season, which reinforces the prospect of stronger average prices in 2023.