Mintec Valentines Index 13.2.17

Happy Valentine’s 2017! Although everyone knows Valentine’s Day falls on February 14th every year, many of us (especially here at Mintec) still wait until the last minute to pick our loved ones a present. And what could be better than the tried-and-tested chocolate?

This makes it the perfect time to look at what chocolate prices are doing. According to the Mintec Chocolate Index, overall chocolate prices are up 4% from Valentine’s last year. However as you can see from the graph, it has clearly been a roller-coaster year for chocolate prices. In this special Valentine’s edition index we look at the price movements for key ingredients that impact chocolate prices.

  • As a key ingredient in chocolate, cocoa butter is a major cost driver. As a result, the chocolate index follows a very similar trend to cocoa butter prices. Prices reached the peak for 2016 in September, up approximately 30% from Valentine’s 2016 due to a decline in cocoa bean production in the Ivory Coast last season. However, prices have fallen back since then due to expectations that the global market will see a surplus of beans in 2016/17, as a result of favourable weather conditions for crop development in recent months in West Africa.
  • Unlike cocoa butter, EU sugar prices had only one way to go – up! This is mainly due to tight stocks. Although, EU sugar production is forecast up 13% y-o-y at 16.2m tonnes this season, consumption will be higher than production at 18.8m tonnes, exceeding production and dragging down stocks. As a result, sugar stocks for 2016/17 are forecast down 75% y-o-y at 0.3m tonnes.
  • Whole Milk Powder (WMP) prices in the EU have increased 50% since last Valentine’s. Falling milk production in the EU reduced volumes of excess milk for conversion into WMP, driving prices up in 2016. However, by January this year, buyers had generally covered their stocks for immediate requirements, which led to a slowdown in demand.
  • Prices for palm oil, which is only used in small quantities along with other vegetable fats as an alternative for cocoa butter, rose throughout last year, due to tight supplies following a decline in production in Southeast Asia in 2015/16. In addition, production in Malaysia, the world’s second largest producer, during the first three months of the 2016/17 season, was down 7% y-o-y.