Russian chocolate price rise forecast - Brief Article - Statistical Data Included

Eurofood, March 29, 2001

Confectionery market experts predict that the price of chocolate in Russia will rise significantly this year due to a jump in world cocoa prices. "A rise in the price of raw materials always leads to higher prices for finished output," Lyubov Sorokina reported, head of the planning department at the Moscow confectioner Kranksky Oktybar. Sorokina noted that cocoa accounts for between 70% and 90% of chocolate's total price.

According to Sorokina, chocolate prices can be expected to rise in the second half of this year, a time when many companies' contracts expire for purchases of cocoa beans at fixed prices. "For now, Moscow plants are not hiking up prices." Sorokina added.

Monthly, the confectioner purchases and processes 800 tonnes to 900t of cocoa beans. "The first to raise prices will be small confectioners," Valeryan Khubulava, head of the Sladko group, which includes Zarya, Konfi and Volzhanka, reported. Moreover, according to him, many confectioners will be forced to hold output prices at former levels in order not to lose customers. Sladko purchases between 700t and 800t of cocoa beans a month.

SUPERIOR QUALITY CHOCLATE PRICES TO RISE

According to Alexei Sviridov, head of the material and technical supply department at the Odintsovo confectioner, "The price of superior quality chocolate could rise." Russia imported 71 900t of cocoa beans in 2000 for a total cost of US$73.8m (79.1m [European Dollar]) against 49 700t for US$73.9m in 1999.