Cocoa prices surge on Asia's chocolate binge

Surging consumption of chocolate in Asia is pushing cocoa bean prices to the highest level in three years as buyers including Barry Callebaut expand their search for more supply.

While demand in the region ranked as the world's lowest per capita last year, the market will grow at almost twice the global rate over the next four years, according to researcher Euromonitor International.

Barry Callebaut, the world's largest producer of bulk chocolate, has doubled capacity in Asia since 2009 as Cargill and Archer-Daniels-Midland added bean-processing plants, mainly in No3 world producer Indonesia.

Growth in Asian demand has contributed to a rally in cocoa, the key ingredient for chocolate, which climbed to the highest level since August 2011 in New York. Rising consumption in emerging markets including China and India may spur shortages that extend into the next decade, with the global bean deficit seen reaching 1 million tonnes by 2020, according to Hardman & Co, a London-based research firm.

"In the longer term, the scarcity of quality cocoa is a serious concern for our entire industry," Barry Callebaut chief executive Juergen Steinemann said.

Asia, home to about 3.7 billion people, or more than half the world's population, would be the consumption "powerhouse" for cocoa and chocolate, said Gerard Manley, a managing director at Singapore-based Olam International, which supplies about 10 per cent of world beans.