Cocoa Industry in European Market: Trends in Prices and Demand-Supply Factors

Running Head: ECONOMICS FOR BUSINESS 0
Economics for business
AUGUST 5, 2018

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Contents
Introduction...............................................................................................2
Cocoa Industry in European market..........................................................2
Demand and Supply of Cocoa in European Market..................................3
Trends in Cocoa prices from the year 2010-2017......................................4
Demand and Supply factors affecting Cocoa Prices..................................6
Effect of rise or fall in Cocoa prices on Cocoa producers or farmers........7
Impact of fluctuations in Cocoa prices on Chocolate producers................8
Conclusion................................................................................................9
References............................................................................................10

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Introduction
The report brings about the description of cocoa industry in European market, and analysing
the trends in the prices of cocoa. Cocoa may refer to the chocolate or the cocoa bean or just
cocoa, is the dried and fully fermented seed obtained from Theobroma Cacao from which the
cocoa solids and the cocoa butter can be extracted. In other terms cocoa, includes the drink
also known as hot chocolate, cocoa powder and others (Agiboo, 2018). There is a significant
growth of the cocoa industry all over the world, as the consumption of chocolate is always
increasing. The production and growth of cocoa is best achieved in hot, tropical, climate near
the equator. The cocoa production in Europe, offers good opportunities to the other
developing countries. Europe accounts as a major force or hub for the cocoa production. In
the cocoa industry, the cocoa beans served as a major product area, followed by the cocoa
butter, cocoa beach, fat, oil, and the cocoa paste. Therefore, there is a significant growth and
wide application of cocoa products in the European market. Thus, the demand and supply of
cocoa and the trends in the prices are described in the later part of the report (Adegoke,
2018).
Cocoa Industry in European market
Cocoa production in Europe reported major growth and changes past several years. The
popularity of the chocolate is on rise in the European market. The world’s major producers of
cocoa are found in West Africa, Southern Asia, and South America. The demand for the
high-quality fine flavour cocoa is on rise. Cocoa is the raw material or input required in the
production of chocolate. Chocolate is the key ingredient, in many foods such as milk shakes,
candy bar, and the cookies. Fine flavour cocoa accounts for around the 5%, of the world’s
cocoa production. Along with the development in the cocoa production in the European
market, follows the evolution of the Europe’s specialty coffee market, also but at a slower

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pace. However, the major development includes the increased demand or preference of the
consumers in the single origin chocolate. Also, there is a direct trade carried out between the
producers and the small, and medium size chocolate manufacturers in the fine flavour cocoa
market. On one side, there is a growing demand for the chocolate is accompanied by the
healthy living, because the consumers in the Europe are more concerned about the intake of
the food, which affects their wellness and fitness. Cocoa contains flavonoids, which are
associated with several health benefits, such as lower blood pressure, improvement in
cholesterol levels in the body. Among all the variants of chocolates the dark chocolate, is
healthier for the human body, due to the higher presence of cocoa. According to the current
statistics, the nation accounts for nearly 45% of the worldwide dark chocolate, which is
expected to rise and grow at the rate of 8%, globally by the end of the year 2019 (LMC
International, 2018).
Demand and Supply of Cocoa in European Market
In the economic theory, the law of demand and supply are considered as one of the basic
principle governing the economy of a country. Demand refers to the quantity of a product or
a service that consumers are willing to buy, at a particular price in a particular period. Supply
of a product means the quantity of a product available for sale at a specified price at a given
point of time in the market (Science direct, 2018). There is a positive relationship between
the supply and price of a product. On the contrary, demand of a product establishes negative
relationship between the demand and price of a product. If the demand of a product or a
service increases then there is a fall in the price. On the contrary, if the demand of a product
decreases then there is an increase in the price of the product. The point at which the quantity
supplied is equal to the quantity demanded is defined as the equilibrium price (Mind Meister,
2013).