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© 2017 Kennemer Foods International Inc. All rights reserved. Confidential.

Global Cocoa pricesKakao Konek – 6 Dec 2017

Simon BakkerKennemer Foods


Key Determinants of Global Prices

Annual production

Weather and climate

New hectarage

Geopolitical issues

Supply Demand

Consumption in US / Europe

Emerging markets

Rise in per capita income


Developments over last year

• Prices decreased last year



• Prices decreased last year• Current prices still depressed



• Prices decreased last year• Current prices still depressed• Main causes:– Unexpected big harvest in Ivory Coast – Weaker demand in emerging markets Russia and

Brazil



• Prices decreased last year• Current prices still depressed• Main causes:– Unexpected big harvest in Ivory Coast – Weaker demand in emerging markets Russia and

Brazil• Where do we go from here?


INDUSTRY Outlook – DEMAND SIDE


Trends: Demand Outlook

• Demand resurgence in traditional markets


Resurgence in Traditional Markets

Source: CCS Cocoa, 2017



• Demand resurgence in traditional markets• Consumption picking up significantly in

emerging markets – Russia– Turkey– Brazil– China and India


Significant pick up in Emerging Markets



Chocolate Sales Outlook (Growth 2014-2022)

Source: Euromonitor, 2017



• Demand resurgence in traditional markets• Consumption picking up significantly in

emerging markets – Russia– Turkey– Brazil– China and India

• Overall positive outlook


INDUSTRY outlook – SUPPLY SIDE


Trends: Supply Outlook

• Ivory Coast – expected revert to “normal” production

• Ghana – production steady




• Ghana – production steady• Indonesia– continuous dramatic decline


Indonesia in dramatic decline

Indonesia Main Crop Trend





• Ghana – production steady• Indonesia– continuous dramatic decline• Minor Origins– Ecuador: bright spot– Not replicated in other minor origins


Minor Origins


Ecuador Cocoa Production Brazil Cocoa Production

Nigeria Cocoa Production Cameroon Cocoa Production




• Ghana – production steady• Indonesia– continuous dramatic decline• Minor Origins– Ecuador: bright spot– Not replicated in other minor origins

• Lower prices reducing new planting


Conclusion

• Much brighter prospects in medium to long term

• Philippines– Building cacao industry resilience– Short term volatility– Increasing yield is key– Raising Philippine brand as high quality origin

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