Chocolate Economics

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AnaLysis of demand and supply of cocoa

Managerial Economics Study Project

September 25, 2015

September 25, 2015

Arjun K (PGP15069)

Arun Shashi (PGP1570)

Aditya Narvekar (PGP15093)

Saravana Raja Kumar T (PGP15107)

Sumit Chaurasia (PGP15115)

Arjun K (PGP15069)

Arun Shashi (PGP1570)

Aditya Narvekar (PGP15093)

Saravana Raja Kumar T (PGP15107)

Sumit Chaurasia (PGP15115)

Contents

Introduction: 1

About Cocoa and the Cocoa Products industry: 1

Cocoa Prices Jump 30 Percent in 18 Months 1

Forecast of Chocolates: 2

Demand for Cocoa in the world: 2

Pricing in chocolates 5

Demand and Supply function 6

SUPPLY 10

Introduction:

When I was a kid, I enjoyed the dairy milk chocolate for 5 rs. It was perfect and heart-warming. Now after 15 years dairy milk offers a product which is almost half in quantity of the product back then. This generated a curiosity in us and we started to find answers based on the microeconomic perspective. We zeroed on this and found that the most crucial factor in the production of chocolate is cocoa. In this report we have analysed the demand and supply of cocoa and how it affects the price of chocolate. Our research findings and data are collected from various national and international reports.

About Cocoa and the Cocoa Products industry:

Cocoa is a critical cash crop that is produced in a few specific regions of the world. Specific climatic conditions are necessary for the crop to grow. Travelling along a global supply chain, cocoa beans go through a complex production process that consists of the farmers, buyers, shipping companies, processors, manufacturers, and distributers. The cultivation process is delicate. This is because the trees are susceptible to the vagaries of weather, diseases and insects. The cocoa business is not like the larger industrialized agribusinesses, the majority of cocoa comes from small farms, which rely...