ICCO, (The International Cocoa Association) has published its latest quarterly bulletin, reporting that crop deficits are expected to be greater than previously anticipated due to a shortage of supplies from major West African producers, Ghana and Ivory Coast, according to Neill Barston.
This announcement comes amid renewed volatility in global cocoa prices, which surged to $12,000 per tonne on the New York and London Futures commodity markets in April, before plummeting over 30% to just above $7,000 the following month, surprising market observers.
However, prices have since rebounded to around $9,300 per tonne in May, still more than triple the value from 18 months ago.The ICCO also noted that global cocoa production and grindings are projected to decline by 11.7% to 4.461 million tonnes and by 4.3% to 4.855 million tonnes, respectively.
This decline has added to the complexity of the market, with consumers worldwide experiencing higher prices as manufacturers pass on increased costs. Seasonal premium ranges saw price increases of over 30% last December, and similar trends were observed during Easter due to elevated processing costs for both cocoa and sugar.
However, grinding at origin has slowed due to a lack of beans, despite initial investments in value addition by producing countries.
The ICCO also reported that global exports of cocoa beans and semi-finished products, measured in bean equivalent, reached 2.36 million tonnes from October to December 2023, a nearly 6% decrease from the 2.5 million tonnes recorded in the same period the previous season.
This decline in trade may be due to supply tightness from West African producers.At the recent World Cocoa Conference, the issue of farmer pay amid soaring cocoa prices was a key topic.
The event emphasized the importance of paying enhanced wages to farmers in Ghana and Ivory Coast to ensure a living wage and the future viability of the industry.
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