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Chocolate Economics Essay

2500 words - 10 pages

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AnaLysis of demand and supply of cocoa
Managerial Economics Study Project
September 25, 2015


September 25, 2015

Arjun K (PGP15069)
Arun Shashi (PGP1570)
Aditya Narvekar (PGP15093)
Saravana Raja Kumar T (PGP15107)
Sumit Chaurasia (PGP15115)
Arjun K (PGP15069)
Arun Shashi (PGP1570)
Aditya Narvekar (PGP15093)
Saravana Raja Kumar T (PGP15107)
Sumit Chaurasia (PGP15115)

Contents
Introduction: 1
About Cocoa and the Cocoa Products industry: 1
Cocoa Prices Jump 30 Percent in 18 Months 1
Forecast of Chocolates: 2
Demand for Cocoa in the world: 2
Pricing in chocolates 5
Demand and Supply ...view middle of the document...

The steadily increasing demand from worldwide consumers is encouraging a number of efforts. Funds are getting committed to support cocoa farm sustainability.
Cocoa Prices Jump 30 Percent in 18 Months

“The price of cocoa beans has been climbing since early 2013 and reached over $3,100 per metric ton at the end of June - a 37-percent increase since January 2013, and a three-year high. This price increase doesn’t seem to have curbed our desire for chocolate though!”

There has been a global increase in demand of Chocolates which has pushed up the prices of cocoa drastically. Our research was to find answers to this question. We found that the demand for chocolates has increased manifold in the previous decade and this would continue in the near future due to the rising disposable income, majorly in the APAC region. Major consumers being China and India. They are expected to propel the demand of chocolates further eventually cocoa demand and consumption. The candy and confection industry remained strong through recession, with the chocolate industry in particular having strong sales despite belt tightening. A chocolate bar is a status of ‘affordable luxury’. There is application of chocolates in Beauty industry. A number of chocolate franchisee and chocolate themed stores have sprung like ‘Café Chocolade’ in Pune.

The Chocolate industry has proven resilient in the times of recession. Growth will continue to be strong as chocolate gains in popularity in the new markets and the global economy improves. Healthier varieties, such as dark chocolate, are gaining market share and discerning consumers are willing to pay a premium for ethical production. Through it all, chocolate demand continues to grow. This has increased the imports of cocoa in India. The government is encouraging farmers to produce cocoa. To secure good quality cocoa beans in the long term, private companies like Mondelez, Jindal Cocoa, Amul, Campco are encouraging cocoa cultivation. Mondelez cocoa cultivation has been a success story. The domestic production of cocoa has a demand in international markets with global chocolate stalwart Mars has purchased India made cocoa.
Forecast of Chocolates:

The project is an effort to establish a relationship between the various parameters in the Chocolate industry and apply the concepts for learning the basic concepts of Economics.

Demand for Cocoa in the world:
Consumer demand for chocolate is on the rise worldwide. The National Confectioners Association reports that chocolate as the favourite flavour for 52 percent of Americans. Recent research has found that chocolate can help reduce risk of heart attacks, cancer and it also contains antioxidants and minerals. There are no indications that caters to the demand for chocolate anytime soon. For example the following data shows the data about the consumption of Chocolate and Cocoa products in the world.

Europe and the United States are the primary regions for chocolate...

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