The second-quarter grind data released on 16 July told two very different stories depending on which side of the world you were reading from. The Cocoa Association of Asia (CAA) reported Q2 2026 grindings of 224,646 tonnes, up 25% year on year and well ahead of the 9% growth the market had expected. Europe, by contrast, processed 316,366 tonnes, a 4.6% decline and the weakest second quarter in six years.
This was not a one-off. Asia’s Q1 grind also surprised to the upside, rising 5.2% when analysts had forecast a decline. Taken together, first-half grindings across Europe, Asia, North America and Ivory Coast reached 1.63 million tonnes, up 2.6% on the same period last year. Asia accounted for essentially all of that growth, adding around 56,000 tonnes and more than offsetting Europe’s decline of 43,000 tonnes.
Reading the Numbers with Caution
Two caveats are worth stating plainly. First, the 25% jump is measured against a soft Q2 2025, when high bean prices squeezed grinder margins across the region. The base flatters the comparison. Second, two strong quarters do not yet make a structural trend.
Even so, the direction is hard to ignore. Q1 2026 exceeded every individual quarter recorded in 2025, and Q2 held that level rather than giving it back.
The drivers also look more durable than a base effect. Grinding capacity has been migrating toward origin and toward where consumption is growing. Chocolate demand in India and Southeast Asia has held up better than in Western markets, which are still weighed down by two years of high retail prices. Analysts reading the Q1 data pointed to improved grinder margins and stronger forward demand coverage across key Asian markets.
Notably, the market did not read the July data as bullish. Cocoa futures fell on the release, because Europe’s six-year low and rising exchange inventories dominated sentiment. Asia’s strength was the offset, not the headline. That gap between where prices are set and where demand is growing is part of what makes the regional story worth watching.
Origin Countries Are Capturing More Value
The regional shift is not only about where beans are ground. It is also about who captures the value. Indonesia’s cocoa exports reached USD 3.5 billion in 2025, and the composition of that figure is telling: roughly 62% came from cocoa fats and oils, with cocoa butter, powder and paste dominating the export mix. Whole beans barely register. Indonesia has effectively transitioned from a bean exporter to a processing origin, and its grinding capacity now anchors much of the regional demand growth the CAA numbers reflect.
The destination data reinforces the consumption story. Indonesia’s cocoa exports to India alone were worth over USD 600 million in 2025, led by cocoa butter and powder. Demand growth in the region is not only a processing phenomenon; it reflects a widening consumer base for chocolate across Asia.
For anyone working in the first mile, this matters. Processing at origin shortens the distance between the farm gate and the point where traceability data has to be complete. Whether beans are destined for a grinder in Makassar or a chocolate maker in Hamburg, the same questions apply: which plot did this come from, who grew it, and can the sourcing be verified against deforestation requirements. With checks under the EU Deforestation Regulation (EUDR) now embedded in supply chain verification processes, exporters in the region are working through those questions in real time, often against a backdrop of congested transshipment hubs and rising freight costs.
What this means
- For exporters and processors: the demand signal is clear, but it comes with a compliance clock attached. Buyers on both sides of the shift, regional grinders and European chocolate makers alike, are asking for the same evidence: plot-level geolocation, verified farmer records, deforestation-free sourcing. The exporters best positioned to capture the new demand are the ones whose first-mile data is already in order.
- For cooperatives and field teams: processing at origin raises the stakes on data quality at the point of purchase. Fewer intermediaries means fewer chances to reconcile records later. Traceability either exists at the first transaction or it does not.
- For buyers: supply chain risk is regional now. Sourcing strategies built around European processing hubs need to account for a demand base, and a compliance environment, that increasingly runs through Southeast Asia.
Singapore, September: Where the region’s cocoa industry meets
It is fitting that the conversation about Asia’s growing role in cocoa will happen in the region’s trading hub. The CAA International Cocoa Conference returns to Singapore from 1 to 4 September 2026, bringing together producers, grinders, traders and the wider value chain at a moment when the region’s demand numbers are commanding attention.
Farmforce will be there. If you are attending and want to talk about first-mile traceability, EUDR readiness, or what verified sourcing looks like in practice across Asian supply chains, come find us. One question we will be putting to exporters and grinders throughout the week: how is EUDR verification actually changing your buying season on the ground, and where does the data still break down?
The CAA publishes its Q3 grind figures on 15 October. We will revisit these numbers then to see whether the first half’s momentum holds.
Farmforce provides digital solutions for managing the first mile of agricultural supply chains, from farmer registration and GPS plot mapping to harvest purchasing, deforestation monitoring, and EUDR compliance. To see how Farmforce can support your traceability and sourcing operations, request a demo.
