FCMP

Import markets mainly look at New Zealand as EU and Latin American producers are locally oriented

Europe

Stable and quiet market

The EU FCMP market is stable, with production taking place only when a sales contract has materialized and at the fair value price of around EUR 4250 ex works. With the cocoa prices appreciating again the demand by the chocolate industry may get a further hit, as it may even become difficult for some chocolate producers to keep their heads above the water. See the additional graph below for some more details on the cocoa price development.

Americas

Manufacturers are relaxed despite absence of export opportunities

At price levels of USD 4100-4200 FOB FCMP from Argentina or Uruguay is hardly competitive in markets like Algeria. Even exports to Brazil are outcompeted by local product due to the currency headwind these days. Manufacturers are nevertheless comfortable as sales for the upcoming months have been favorable. So at the moment the market is very stable and prices may even hold above global market levels and local Brazilian price levels throughout most of Q1.

Asia-Pacific

Looking for direction

In the final weeks of December there was very little physical action in the FCMP market in APAC and in a sentiment driven futures market the price fell by some USD 200. In China this created some additional bearish sentiment. In the first week of January nobody really knew where the market price was, but it was clear that China was holding off, with many shipments of FCMP having just arrived in ports and lackluster demand. The 2% price decline on the early January GDT was from this perspective even modest, as SE Asia, the Middle East and South America bought product, also post GDT. In the second week of January, the market price veered back up to around USD 3850 FOB. The outlook is uncertain, as the season in NZ and Australia is expected to have quite a good shoulder. All eyes remain on China to see how strong the demand will be after Chinese new year.

NICE TO KNOW:

In our April 2024 Market Watch we first presented a Cocoa price graph. In the past 12 months these have surged to unprecedented height because of poor weather and crop diseases in West Africa, where 70% of the global cocoa production takes place. After considerable relaxation in Q3 of 2024 another surge upwards has begun and the current peak is even higher. As the higher chocolate prices have only recently begun to reach the supermarket shelves it will be interesting to monitor the consumer response and eventually its impact on milk powder purchases by chocolate manufacturers.