Smaller cocoa surplus predicted

The world just can't get enough chocolate.

With 'tremendous” demand in emerging markets looking set to continue this season, the world's third-largest cocoa processor is projecting a sharply smaller global surplus.

Excess cocoa supplies that reached a record last season will probably drop to about 50,000 metric tons, said Gerry Manley, head of cocoa at Olam International.

Demand has picked up in Asia particularly, where countries including the Philippines, Indonesia, India and China are consuming more cocoa powder used in products such as cookies and ice-cream, Manley said. And while West African growers may reap a second year of bumper crops, top producer Ivory Coast is unlikely to repeat last season's record harvest.

'We are very positive on demand,” Manley said in an interview at the company's London offices Thursday. 'We are seeing good demand for cocoa powder across the world, but mainly emerging markets are in a leading position there.”

Changing consumer habits mean some traders may be underestimating growth. Trends including online shopping as well as the rise of artisan shops and bakeries are often missed by traditional data sources, Manley said.