Chocolate: worth its weight in gold?

Middle Eastern consumers with a sweet tooth are buying up ever larger quantities of chocolate, which is helping the price of the commodity soar.
By Dr. Mona AlMunajjed
Sun 02 Feb 2014 09:18 AM

Walking by the confectionary aisle in the supermarket in Riyadh, I was astonished by the wide range of chocolate varieties and flavours. As our craving for chocolate grows, Saudi Arabia is now one of the largest markets for chocolate consumption in the Middle East.

I first discovered the joy of eating chocolate during the years I lived and worked in Geneva. Perhaps this is unsurprising given that not only does Switzerland produce about 150,000 tonnes of chocolate a year, but the Swiss people are greatest chocolate eaters in the world (approximately 12 kilos per person). I acquired a taste for dark chocolate in particular and was delighted to find that not only was it a delicacy, but it brought some health benefits too, according to numerous studies.

Cocoa, the key ingredient in chocolate, contains potent antioxidants, flavonoids, which may increase flexibility of arteries and help improve brain function. It may contribute in preventing heart disease and other circulatory problems, lower cholesterol levels and blood pressure and decrease the risk of cancer. In addition, it contains a multitude of vitamins as well as calcium, magnesium, potassium and iron.

Moreover, recent studies have revealed that cocoa has anti-aging effects on skin as a result of anti-inflammatory agents that increase its hydration and elasticity and protect from ultraviolet radiation. Currently, high antioxidant chocolate facials are used for natural beauty treatments in luxurious health spas.

And to make us all happy, savouring dark chocolate gives us a special pleasure and a feeling of well-being as it releases serotonin and other neurotransmitters that help to alleviate depression, reducing stress and boosting our energy and our mood. More good news: eating dark chocolate in moderation will not cause tooth decay or increased obesity, which are linked to sugar excess. But it still contains around 24 grams of sugar per 100 grammes of chocolate, which is 100 percent of the daily amount recommended for women and around two-thirds for men.

So the message is: dark chocolate is healthy if it contains a high percentage of cocoa solids — 70 percent is good (milk chocolate has only 15-25 percent). Although a high cocoa content doesn’t necessarily mean a superior taste — that depends on the quality of the beans. For sophisticated palates, nothing beats the rich taste of bittersweet dark chocolate and the intensive flavour of its smooth, creamy and seductive texture.

According to 2012 data from the World Cocoa Foundation (WCF), the major world producers of cocoa are Africa (73 percent), Asia and Oceania (14 percent) and the Americas (13 percent).  Among the largest cocoa producing countries are Ghana, Côte d’Ivoire, Indonesia, Ecuador, Cameroon, Nigeria, Brazil and Malaysia.

Demand for chocolate is increasing. The latest data issued by the International Cocoa Organisation (ICCO) (November 2013) revealed that world production of cocoa beans (October 2012 — September 2013) was 3.931 million tonnes while the global demand for cocoa beans is estimated to be higher, at around 4.091 million tonnes.

Today, cocoa is one of the fastest rising global commodities traded on the world market. Prices are increasing globally due to escalating cocoa bean prices, which are up by 22 percent and are expected to jump more over the next few years. According to the ICCO the price of cocoa on 31 December 2013 increased to $2,783/tonne from $2,773 the previous day. Bloomberg News estimates that the price may reach $3,200/tonne by the end of 2014. As gold goes down cocoa goes up!

Although generally rising, the daily price of cocoa fluctuates according to global supply and demand, which depends on many factors such as stock/grind ratios, prospects for future production/demand, how processing businesses are run and international food prices. Price increases may be attributed to, for example,adverse weather conditions, low stockpiles or political instability in producing regions.

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The general trend is towards a continuous shortage in supply of cocoa beans in cocoa-growing countries, touched by abnormally dry weather conditions especially in Africa, where some farmers faced by poor working conditions and outdated farming practices are shifting to more gainful harvests such as rubber which produces more than cocoa, with much easier work.

Other factors are related to increasing global consumption of chocolate. According to Euromonitor International estimates, global chocolate confectionery sales are expected to reach 7.3 million tonnes in 2014. Consumption of dark chocolate is especially high in Europe and the USA. According to data from Leatherhead Food Research, countries that consumed the most chocolate in 2012 were led by Switzerland with almost 12kg per person, Ireland with almost 10kg, UK (9.5kg), Austria (8.8kg), Belgium (8.3kg), Germany (8.2kg), Norway (8kg), Denmark (7.5kg)  France (6.3kg), and the USA (5.5kg).

Although consumption outside Europe and the USA is still comparatively low, the emerging markets are showing an increasing appetite for chocolate, especially in Asia where consumption (especially of dark chocolate) has doubled over the past ten years in India and China. According to ‘India Chocolate Market Forecast & Opportunities, 2018’, a report by TechSci Research in 2013, the India chocolate market will be growing at the compound annual growth rate of 23 percent by volume from 2013 to 2018 reaching 3.41 million tonnes and expected to exceed $3.2bn by 2018.

The China chocolate market is also increasing exponentially, growing almost 40 percent between 2008 and 2012. According to Euromonitor International, sales of chocolate in China reached $1.5bn in 2010.

In the Middle East, where people have a remarkably sweet tooth and sharing confectionery is part of local custom, demand has widely intensified. According to a report from KPMG Global Audit Company, chocolate sales in the Middle East and North Africa will grow by 61 percent to reach $5.8bn in 2016.

In the GCC countries, chocolate products, which includes sweetened cocoa powder, chocolate and other food preparations containing cocoa as well as sugar confectionary containing cocoa are among the top commodity imports. Saudi Arabia is the largest importer at 62,480 tonnes in 2011 (FAO data) followed by the UAE, 37,155 tonnes, Oman, 8,021 tonnes, Kuwait, 7,793 tonnes, Bahrain, 4,908 tonnes and Qatar 3,902 tonnes.

Chocolate confectionary is also flourishing in the GCC countries where an increasing youthful population and affluence are shaping the huge demand for chocolate. In Saudi Arabia, chocolate products constitute 55 percent of the confectionary market which is forecast to reach $2.26bn by 2018. According to Euromonitor International, chocolate confectionery sales between 2010 and 2011 increased from $596.9m to $675.7m. The market is predicted to grow 43.5 percent by 2016.

In the UAE, the booming chocolate market has been estimated by AC Nielson Audit at $161m and growing at a rate of 27 percent in sales value and 14 percent in volume. Date factories in Dubai and Abu Dhabi have introduced chocolate to their date confectioneries by covering the national fruit with chocolate: a distinctive Arabian combination that is a successful world export.

In 2012 Dubai launched the Middle East’s most expensive box of chocolates (Debauve & Gallais, approximately $105 per half kilo). Although it features in the top ten most expensive chocolates in the world it can’t compete with the number one: Chocopologie by Knipschildt at approximately $2,600 per half kilo. While most of us would never consider spending so much on a luxury like this, we all like a little treat now and then, and dark chocolate fits the bill. Let us hope that rising prices of chocolate don’t price us all out of the market.

Dr Mona Al Munajjed is an author and advisor on socio-economic issues. (mona.almunajjed@gmail.com)

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