What is Cocoa Powder? Why Buy It?
Cocoa powder, derived from the beans of the Theobroma cacao tree, is a critical ingredient in the global food industry. It’s known for its rich flavor, deep brown color, and unique nutritional profile, making it an essential component in various food and beverage products, particularly in chocolate manufacturing. The journey from cocoa beans to cocoa powder involves a series of intricate processes, including fermentation, drying, roasting, and grinding, each stage contributing to the final quality of the product.
Cocoa powder is not only revered for its culinary uses but also for its potential health benefits. It’s packed with flavonoids, antioxidants, and a range of other bioactive compounds that may contribute to overall well-being. However, as with any food product, the consumption of cocoa powder comes with its potential risks and side effects, which are crucial to consider.
Top Producing/Exporting Countries of Cocoa Powder
Cocoa powder production is heavily concentrated in countries where cocoa trees thrive, primarily in regions close to the equator. The top cocoa-producing countries also dominate the export market:
- Ivory Coast: The Ivory Coast (Côte d’Ivoire) is the world’s leading producer of cocoa beans, accounting for about 40% of global production. The country’s economy heavily relies on cocoa exports, with most of the beans being processed into cocoa powder and other products for export.
- Ghana: Ghana is the second-largest producer of cocoa beans, contributing around 20% of the world’s supply. The country is known for its high-quality cocoa, which is highly sought after by chocolate manufacturers worldwide.
- Indonesia: Indonesia is a significant player in the cocoa industry, ranking as the third-largest producer. Although it produces a smaller quantity compared to Ivory Coast and Ghana, Indonesia has been focusing on increasing its cocoa bean processing capacity to export more value-added products like cocoa powder.
- Nigeria: Nigeria is another major cocoa producer in West Africa. The country is among the top five cocoa exporters, with most of its cocoa beans being shipped to Europe for processing into cocoa powder and other derivatives.
- Brazil: Brazil is the largest producer of cocoa beans in South America and a significant exporter of cocoa powder. The country has a well-established cocoa industry, with a focus on both raw beans and processed cocoa products.
Top Importing Countries of Cocoa Powder
The demand for cocoa powder is global, with several countries importing large quantities to satisfy their domestic markets:
- United States: The United States is one of the largest importers of cocoa powder, driven by the country’s significant chocolate and confectionery industries. American consumers have a high demand for chocolate products, making the U.S. a major player in the global cocoa market.
- Germany: Germany is another top importer of cocoa powder, home to some of the world’s largest chocolate manufacturers. The country’s demand for high-quality cocoa powder is driven by its robust confectionery industry, which exports chocolate products globally.
- Netherlands: The Netherlands is a key hub for cocoa trade in Europe. While the country imports large quantities of cocoa beans for processing, it also imports cocoa powder for use in its thriving food industry. The port of Amsterdam is one of the world’s largest cocoa import centres.
- France: France is a significant importer of cocoa powder, with a strong domestic market for chocolate and other cocoa-based products. The country’s culinary tradition also contributes to the high demand for cocoa powder.
- United Kingdom: The UK imports substantial quantities of cocoa powder to support its chocolate and confectionery industries. British consumers have a long-standing affinity for chocolate, fueling the demand for high-quality cocoa powder.
International Price of Cocoa Powder Per Metric Ton
The unit price ($ per kg) of cocoa powder in the international market depends on a host of different factors including:
- The grade of the produce (usually the more the processing, the higher the price)
- The price of the raw material
- Age of the seeds (this can affect the price)
- Production levels in producing countries
- Economic conditions and the exchange rates between the currencies of the producing and importing countries.
- The quantity ordered (the greater the quantity, the cheaper you can get it per ton)
- Harvest season (it is more costly when it is out of harvest season).
- Weather conditions (some commodities are sensitive to weather conditions).
- Freight & haulage cost
- Percentage of markup
- Import duties, trade tariffs and trade agreements between countries
- Distance from the country of origin
- Technology/Infrastructure available in country of origin
- Relationship between the buyer and seller
That said, as at July 2024, cocoa powder costs between $5,750 and $7,000 per metric ton (1,000 kilograms) in the international market (i.e. $5.75/kg to $7/kg)
How To Safely Source for Your Cocoa Powder Produce
If you find the right export company, buying directly from them can make the purchase process easy and stress-free, when compared with doing the sourcing on your own. That said, there are few things to note when dealing with an export company in Nigeria or Africa. The specific requirements for Nigeria are listed below, but they mostly apply to other African countries:
- The exporting company must be registered with the Corporate Affairs Commission (CAC) to make sure the company is registered and permitted to carry out business operations.
- The export company must also be registered with the Nigerian Export Promotion Council (NEPC).
- The company must possess a domiciliary account to accept international payments.
The company should get all necessary export-related documentation done before the shipment leaves the port of origin. Some of the documents are:
- Certificate of origin
- Bill of lading
- Inspection Certificate (SGS, Cotecna, Bureau Veritas, Intertek, etc)
- Phytosanitary certificate
- Fumigation certificate
Where To Find Reliable Exporters
An important question that still needs to be answered is how to find cocoa powder exporters in Nigeria. You can use any of the methods listed below:
- Attend trade fairs
- Use search engines like Google, Yahoo, etc.
- Search for agents on Linkedln
- Sign up on trade platforms (e.g. Alibaba, Tradeford, Go4WorldBusiness)
- Neogric – Neogric is one of the reliable cocoa powder exporters in Nigeria. Neogric is rated among the best in the exporting business in Nigeria. The company is not limited to the exportation of cocoa powder alone but can export other agricultural produce ranging from perishables to dry seeds.
How To Pay For Your Cocoa Powder Produce
You can pay for cocoa powder using different methods, but three of the popular ways of paying for your agric produce are:
- Bank (T/T) Payment
- Advance Payment
- Letter of Credit (LC)
Bank Payment (T/T)
Bank payment is also known as T/T, “Telegraphic Transfer” or “Telex Transfer” In other words, it is an international wire of funds from the buyer’s bank to the seller’s bank.
A T/T is technically not the same as a wire transfer, which is often done through the SWIFT network. However, when a seller or supplier asks for a T/T payment, a wire transfer is what they are really asking for.
The wire transfer based on the SWIFT system is the most common payment method in international trade. Typically, it takes 1-5 working days to clear, and generally costs between 25 and 50 USD, depending on your agreement with the commercial department in your bank.
Advance Payment
There are sellers that will demand anywhere from 30% to 50% advance payment, and for good reason. If both parties have done deals in the past, sellers can ask for a percentage of the sales (about 30%) before they ship the produce and they can request for the remaining amount after a scanned copy of the Bill of Lading has been sent to the buyer.
It is the safest option for exporters and it also guarantees that they will have some funds to help with sourcing. It is popular among manufacturers on B2B marketplaces like Alibaba and also with commodity traders.
However, advance payment carries considerable risk for the importer (buyer) because the exporter (seller) might not be under as much pressure to ensure quality checks compared with a stricter form of payment. Some might even disappear entirely.
Having said that, advance payment is very useful and is widely used. For instance, the seller might need to secure the commodity in the face of increased competition. It can also be used when the exporter needs some money for sourcing the produce or for processing raw materials.
The most important thing is for both importer and exporter to build mutual trust by having a track record of successful deals with each other or other known companies.
Letter of Credit
Letter of Credit is an agreement generated by the bank of the buyer, guaranteeing payment once certain conditions are met. It is one of the safest types of payment available to both buyer and seller.
Some of the types of Letter of credit are:
- Commercial Letter of Credit,
- Sight Letter of Credit
- Transferrable or Non-Transferable Letter of Credit
- Standby Letter of Credit (SBLC)
- Usance or Deferred Payment Letter of Credit
- Revocable or Irrevocable Letter of Credit
- Confirmed or Unconfirmed Letter of Credit
- Revolving Letter of Credit
- Green Clause Letter of Credit
- Red Clause Letter of Credit
L/Cs are not totally safe (for either buyer or seller) too. For instance, sellers can ship substandard products or those that are different from the ones agreed upon. In this case, the seller gets paid and the buyer receives goods he cannot use.
And speaking of the dangers of L/Cs for the exporter, the conditions in the Letter of credit might be practically impossible to fulfil; if an exporter agrees to such, he might be unable to receive payment. A report stated that of the letters of credit received in the UK, 50% are unworkable while 70% are rejected by the banks for payment.
Shipping & Delivery Terms
When shipping your products, it is important to take note of a few factors:
Order Quantity
For smaller shipments, airfreight is often the preferred option but as the order volume increases, sea freight could become significantly cheaper. Usually when the order is close to a full container load (20 ft), sea freight is used. Although the Covid-19 pandemic caused an increase in cost of delivery of products, prices have stabilised.
Cost of Delivery
When the order is of a large volume, sea freight often turns out cheaper than air freight. In fact, air freight could be up to 6 times more costly than sea freight if the volume is large enough.
Time of Delivery
Sometimes, time will be more important to the buyer than the cost of delivering the product. In this case, air freight will be the logical option (as stated above, the cost will be more). But if you have more time as a buyer, you should strongly consider using sea freight.
Incoterms
Incoterms refer to generally accepted shipping and payments terms. For example, buyers that have representatives in the source country or that can negotiate with the freight company can use the Free of Board (FOB) terms, since it gives them more control and can save them some money.
However, if the shipment is small or the buyer doesn’t have an extensive network to effectively handle payment for freight, insurance and port charges, he will be better off choosing the Cost-Insurance-Freight (CIF) payment option.
Neogric: Top Exporters and Suppliers of Cocoa Powder
We invite you to place your order for high-quality cocoa beans with us at Neogric. We are a trusted global commodity sourcing and trade solution provider with deep expertise in the cocoa powder industry. Whether you’re a small business or a large corporation, our wide range of products and technology powered, end-to-end supply chain make the export of quality cocoa powder easy, quick and safe. Whichever region of the world you are, be it Europe, Asia, USA, Canada, Other North/Central American countries, Africa, South America or Oceania, you can reliably order your agricultural produce and we will ensure it is successfully delivered to you, on time.
Why Buy Cocoa Powder From Neogric?
Choosing Neogric as your cocoa powder supplier offers several advantages:
- Quality Assurance: We maintain strict quality control standards, ensuring our cocoa powder and other products are of the highest quality.
- Wide Product Range: We offer a diverse selection of products, catering to various needs.
- Reliable Supply Chain: Our efficient technology-powered end-to-end supply chain ensures timely delivery of your orders.
- Expertise and Support: Our team of experts provides valuable insights and support, making your purchasing process smooth and hassle-free.
Our Cocoa Powder Trade Specifications are listed below:
- Origin: Nigeria or Ghana
- Product Name: Cocoa Powder
- Physical Specification: Based On Buyer’s Specification
- Quantity: Based On Buyer’s Specification
- MOQ: 10 Metric Tonnes
- Trade Process: Ex Works/FOB/CIF
- Admixture/Impurities: 2% Max
- Inspection: SGS/Cotecna/Intertek/Bureau Veritas
- Packaging: Based On Buyer’s Specification
- Payment Method: TT (Bank Transfer) or L/C
- Shipping Time: 15 to 25 Days After Confirmation of TT or L/C
- Loading Port: Lagos, Nigeria or Tema, Ghana
Expected Shipping Documents
- Bill of Lading
- Certificate of Origin
- SGS Inspection Certificate
- Phytosanitary Certificate
- Fumigation Certificate
- Commercial Invoice
- Packing List
Contact Us
Tel: +2348147860157
Email: neo@neogric.com
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