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(Bloomberg) -- Cocoa prices will decline by the second half of 2015 because the harvest outlook is good and consumption won’t rise as fast as some expect, according to Ernst Tanner, Chief Executive Officer of chocolate maker Lindt & Spruengli AG.
“Demand is being played up, but we’re growing way faster than other chocolate makers, and I don’t see that,” Tanner said in a phone interview today. “Everyone says demand in China and India is coming, but they have such small consumption that it won’t have an influence yet.”
Commodity trader Olam International Ltd. last month said it expects cocoa prices to rise for a fourth consecutive year in 2015, driven by a global shortage as demand will exceed supply by 120,000 metric tons due to lower output in West Africa. Cocoa futures rose 14 percent last year in London trading.
Lindt will grow 6 percent to 8 percent this year, excluding its acquisition of Russell Stover Candies Inc., Tanner said. The world’s largest producer of premium chocolate reported a surge in full-year sales after Russell Stover gave it access to more U.S. consumers. The stock rose to an all-time high today.
Tanner said he can’t imagine any supply problems in the next five years. The Kilchberg, Switzerland-based chocolatier spends millions of francs every year to support 20,000 farmers in Ghana with training, equipment and education with the goal of doubling productivity. Ghana is the world’s second-largest cocoa producer after Ivory Coast.
“With these programs, production will substantially increase in the near-term,” Tanner said. “In addition, farmers have better income, can support their families better and the next generation realizes it can make money with cocoa farming.”
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