Cocoa prices have soared to record highs over the past year, yet demand in China for cocoa and chocolate products remains robust, even as the country grapples with economic challenges. In the July-September quarter, China’s economic growth slowed to 4.6 percent, down from 4.7 percent in the previous quarter, and is projected to miss the modest target of 5 percent for the year. The World Bank forecasts growth to further decline to 4.8 percent in 2024 and 4.3 percent in 2025.
Despite these economic woes, China’s appetite for cocoa has not waned. Since 2022, cocoa futures prices have surged dramatically, reaching a record high of $12,000 per ton in April, compared to $2,500 in December 2022. Although prices temporarily fell to around $7,000 per ton, they have since rebounded to over $10,000 per ton.
Consumer Enthusiasm Unaffected by Price Increases
The rising prices have not deterred Chinese consumers from indulging in cocoa products. According to data from the e-commerce platform Douyin, chocolate sales in China increased by 11.85 percent year-on-year, with growth observed across various brands. Domestic brands like Qiaoxiqi reported significant sales surges, while imported products, including Dubai chocolate, gained popularity. Boutique chocolate stores also experienced increased foot traffic.
Cocoa is not only a key ingredient in chocolate but is also utilized in a variety of products, including desserts, dairy items, and baked goods. The sustained sales and consumption of cocoa products suggest that economic concerns have little impact on this sector.
Supply Chain Challenges Persist Amid Rising Imports
While demand remains strong, China has faced supply chain challenges related to cocoa imports. Factors such as climate change, tree diseases, and pests, combined with logistical issues, have strained cocoa supply chains. The International Cocoa Organization (ICCO) reported a cocoa deficit of 462,000 tons for the 2023-24 season, a staggering 524 percent increase from the previous year’s deficit of 74,000 tons.
Despite these challenges, cocoa imports into China have risen. As of September, total cocoa and cocoa-made product imports registered an annual growth of 1.05 percent, reaching 138,900 tons. To adapt to market conditions, Chinese companies are employing a ‘chocolate+’ strategy, producing and marketing non-chocolate products that incorporate chocolate, thereby maximizing business opportunities in a competitive market.
