Cocoa processors in Brazil see 5% grind jump as country reopens

By Marcelo Teixeira

NEW YORK, Feb 4 (Reuters) - Cocoa processing in Brazil, the world's fifth largest chocolate consumer, has recovered from the pandemic and the industry projects a grinding increase of up to 5% in 2022 as the country, one of the worst hit by the COVID-19, reopens.

According to data from cocoa processors association AIPC, based on data from member companies including Cargill, Olam and Barry Callebaut, total grinding in 2021 reached 224,168 tonnes, 4.4% more than 2020, when demand was hit by lockdowns to control the spread of the coronavirus.

The 2021 number was also 2% higher than the volume processed in 2019, before the pandemic, which shows that the industry has overcame the worst.

Brazil, which had the second largest numbers of deaths by coronavirus behind the United States, however, reported on Thursday 298,408 new cases of the coronavirus in the past 24 hours, breaking the country's previous record for daily infections, and 1,041 COVID-19 deaths.

Anna Paula Losi, AIPC's executive director, said that the industry expects a growth of 4% to 5% in cocoa processing as the economy improves.

Despite a small payment from the government to people who became unemployed during the pandemic, Brazil did not have the large economic stimulus seen in richer economies, Losi says, so the reopening of restaurants, schools and offices have the potential to increase income as more people recover jobs.

"As the economy improves, chocolate consumption tends to increase," she said.

Cargill, Olam and Barry Callebaut are the main processors in the country with capacity to grind 275,000 tonnes per year.

The companies buy nearly all the local production and import a smaller share from African countries, mostly. Processors received 197,654 tonnes of cocoa from Brazilian farmers in 2021, AIPC said, 13% more than in 2020. Imports reached nearly 60,000 tonnes last year, 6% more than in 2020.

Losi said there is room for higher production in Brazil as cocoa plantations https://www.reuters.com/article/us-brazil-cocoa-environment/chocolate-forests-can-cocoa-help-restore-the-amazon-idUSKBN1HJ0H8 are seen as one way to restore forests in degraded land. (Reporting by Marcelo Teixeira Editing by Marguerita Choy)