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The cocoa market in selected East European countries.

According to recent ITC research on the international market for cocoa and cocoa products, countries in Eastern Europe may offer potential for increased sales over the medium term for exporters in developing countries. The present low per capita consumption of cocoa-based products in these markets offers prospects for market growth, as does the increasing number of joint ventures being concluded in the cocoa-processing industries. However suppliers in developing countries should follow developments in these markets carefully in the coming period to identify new export opportunities that may arise.

Czechoslovakia

From 1988/89 to 1989/90 (years given in this article are crop years) imports of cocoa beans into Czechoslovakia dropped from more than 20,000 tons to less than 10,000 tons, and the comparable figure is estimated to be around 9,000 tons for 1990/91.

Imports of other cocoa products have also shown a decrease over the last several years, except for chocolate goods. Imports of cocoa butter came to 22 tons in 1989/90, compared with over 500 tons in 1985/86; cocoa cake and powder imports in 1990 were at 150 tons, down from 650 tons four years earlier; and cocoa liquor (or "paste" as it is sometimes referred to) dropped from 500 tons in 1985/86 to under half that in 1988/89. Chocolate imported in processed form, however, rose from 770 tons in 1985/86 to over 1,000 tons in 1989/90.

Although demand for cocoa and cocoa products is therefore down, imports may pick up over the next several years. The factories involved in cocoa grinding and chocolate manufacturing are being privatized and have started to enter into joint ventures with companies in Western Europe, including the largest Swiss chocolate manufacturer. This should bring new technology, marketing expertise and financial resources to this sector.

During the last five years about 90% of the country's imports of cocoa beans and cocoa products have been from West African countries, namely Cote d'Ivoire, Ghana and Nigeria, although almost all of the imports of cocoa liquor have come from Ecuador.

The two major importers of cocoa beans are Cokoladovny and Cubrex. The first organization imports for all 14 of the Czech chocolate factories, while Cubrex (a trading company recently created by Koospol) has been designated by the two Slovak companies that have grinding facilities to import cocoa beans. (Until October 1990 Koospol was the sole importer of cocoa beans in Czechoslovakia.) Other companies may also import these products.

Hungary

Chocolate consumption has not decreased to the same extent in Hungary as in the other East European markets in the last several years. The country has maintained its relatively high per capita consumption, at almost 1.5 kg for 1990, compared with about 0.6 kg for both Czechoslovakia and Poland (see the table on the opposite page).

Annual imports of cocoa beans into Hungary are currently estimated at around 12,500 tons, which is an increase over import figures for 1988/89 and 1989/90, but a drop from 1987/88. Cocoa drinks are popular in Hungary, and to meet the demand for cocoa powder required for such drinks the industry either imports the powder or buys cocoa beans for grinding purposes. In this case cocoa butter is exported, and the cocoa powder is used locally. Brazil, Ecuador, Cote d'Ivoire, Nigeria and Ghana are the main suppliers of cocoa beans.

Cocoa liquor is also an important import item among cocoa products and will perhaps be even more so in the future. Purchases from foreign sources came to almost 2,000 tons in 1989/90, which represented a drop from the three previous years but a slightly higher figure than in 1985/86. Cocoa liquor is usually imported direct from Brazil and Ecuador. The main reason that no African countries are represented on the list of suppliers is that they export cocoa liquor in blocks of 25 kg. Blocks of this size are not allowed to enter factories because they are too heavy for factory workers to carry. The same regulations on block size apply in other East European countries.

Imported chocolate is becoming quite popular, and local manufacturers have difficulties in competing because of their high production costs. Imports of chocolate came to 1,300 tons in 1989/90, more than double the 1988/89 figure but below the 1987/88 level of nearly 1,850 tons. Joint ventures with chocolate companies in Western Europe have started in Hungary as in Czechoslovakia, in particular with several of the largest Swiss chocolate manufacturers.

Any Hungarian company is now authorized to import cocoa beans. The former state-owned sole importer, Monimpex, has been converted into a shareholding company and continues to be the main importer of cocoa products.

Poland

In Poland per capita consumption of cocoa has usually been at a fairly low level. Imports of cocoa products dropped over the 1986-90 period, except for chocolate items (see table above). Cocoa bean imports fell from 26,000 tons in 1988/89 to an estimated 22,000 tons for 1990/91. [Tabular Data Omitted]

Imports of cocoa cake and powder also decreased considerably, to 1,670 tons in 1989/90 from 5,330 tons the previous year, even though these items are usually used as ingredients in less-expensive products containing some chocolate. Imports of cocoa butter and of cocoa liquor were almost negligible during the entire period. As of January 1992, however, no substitute for cocoa butter will be allowed, which should increase the consumption of cocoa beans in the country.

Poland has traditionally exported a fairly large quantity of cocoa butter, about 4,000 tons annually over the last several years. Cocoa cake and powder produced as a result of the processing of cocoa beans have to a large extent been used within the country.

Poland has been the only East European country to import large volumes of finished chocolate products. In 1989/90 these imports came to 6,620 tons. It also exports these items, with foreign sales coming to 1,400 tons in 1989/90.

The principal supplier of cocoa beans to this market is by far Brazil. In 1989 several African countries, namely Cameroon, Ghana and Nigeria, started to increase their market shares.

Until the end of 1989 the state-owned company Agros accounted for at least 90% of all imports of cocoa beans and cocoa products. Private companies are now authorized to import direct, and the role of Agros in the import trade is gradually decreasing. London-based cocoa traders have started to open representative offices in Poland.

One of the largest U.S. soft drink and food manufacturers has acquired 40% of Poland's leading chocolate maker. Other joint ventures with foreign firms are also under negotiation.

With its large population and low per-capita consumption, Poland has good prospects for becoming a major chocolate-consuming country in the future.

Bertil Byskov is an ITC market development officer on commodities and agro-based products.
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Author:Byskov, Bertil
Publication:International Trade Forum
Date:Oct 1, 1991
Words:1154
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