Barry Callebaut AG's chief executive outlined the company's near-term outlook during a media call on Tuesday, saying the firm's volume projections for the upcoming year take into account anticipated El Nino weather patterns.
The CEO said management does not expect cocoa prices to return to the elevated levels observed in recent years, noting that cocoa markets underwent substantial price increases over the past two years.
Turning to demand dynamics in the Middle East, the executive reported a pullback in recent weeks but stressed that the softness had not had a material effect on the group's overall results. He added that activity in the United Arab Emirates is showing signs of recovery, though it remains below earlier levels.
Asked about the principal implications of the Middle East developments, the CEO emphasized the impact on fuel costs, stating, "the main impact from the Middle East without a single doubt is the fuel impact." He explained that higher fuel prices have a direct effect on Barry Callebaut's operations and a secondary, indirect effect on consumer demand.
Looking further ahead, management flagged fuel-related expenses as the company's main cost concern for fiscal year 2027. The executive described these fuel costs as the primary item that could influence overall cost levels for the business during that period.
The comments left the company signaling a relatively stable cocoa price outlook while drawing attention to energy-cost volatility as the main operational risk tied to recent regional market shifts.
Context that the company conveyed
- Volume guidance includes an assumption for El Nino weather patterns.
- Company does not foresee cocoa prices rising back to the recent peaks that followed substantial increases over the last two years.
- Short-term demand in parts of the Middle East has weakened but so far has not materially changed group performance; UAE activity is improving but has not yet reached prior levels.
- Fuel costs are the chief concern stemming from the Middle East situation and represent the main cost worry heading into fiscal 2027.