Sweet tooth in China seen as boost for cocoa

Sweet tooth in China seen as boost for cocoa

KUALA LUMPUR (Reuters): China's cocoa powder consumption may reach 18,000 tons per year from 17,000 tons in coming years as Chinese develop a taste for chocolate, traders said on Friday.

Chinese customs figures showed chocolate and cocoa products imports reached 3,719 tons from January-May, up 10.8 percent compared with the same period last year.

"Cocoa is very new for China. Big chocolate makers such as Cadbury and Mars have set up joint venture plants for domestic consumption...they have been in the market for only between three to four years," said one trader in Guangdong province.

"But I can see powder consumption growing because people's exposure to chocolate is also growing," he told Reuters.

Grinding capacity in China, the world's most populous nation, is estimated at 28,000 tons, far below neighboring Japan at 48,000 tons or Malaysia, whose annual capacity of 165,000 tons makes it the world's eighth largest grinder.

Traders said grinders in China produce up to 14,000 tons of cocoa powder each year while imports stand at around 3,000 tons.

Most of the powder is consumed locally, but 90 percent of butter produced by grinders is for the export market.

Every year, grinders produce about 10,000 tons of butter, which is used to make chocolate bars, jam and also for soap and cosmetics.

Traders said local grinders imported beans from Indonesia, Malaysia and West African countries, adding they expected the grinding capacity to stay unchanged because China did not grow cocoa.

"China is a sleeping giant and there's a big potential there. But doing business could be tough because of the bureaucracy and so on," said another trader in Malaysia.