CocoaNetwork (New York) – The International Cocoa Organization (ICCO) has revised their 2022-2023 cocoa production estimates upwards by 43,000 tonnes to 4.996 million tonnes. The latest information shows that cocoa production in Côte d’Ivoire was higher than previously assumed and now estimated at 2.241 million tonnes (up by 61,000 tonnes). An upward adjustment of 14,000 tonnes has been made for Ecuador (from 365,000 tonnes to 454,000 tonnes). With a poor mid-crop, Ghana’s production has been revised downwards by 26,000 tonnes (from 680,000 tonnes to 654,00 tonnes). A deduction of 4,000 tonnes has been made for Peru (from almost 170,000 tonnes to 166,000 tonnes). Minor downward revisions for a few countries, amounting to 2,000 tonnes, have also been accounted for. Global grindings for the 2022/23 season are now estimated to be higher by 18,000 tonnes at 5.02 million tonnes compared with data in the previous Bulletin. Grindings have been adjusted upwards for both Germany and Bulgaria by 15,000 tonnes each from 435,000 tonnes to 450,000 tonnes and from 21,000 tonnes to 36,000 tonnes, respectively. Grindings for Côte d’Ivoire have been revised upwards by 23,000 tonnes (from 770,000 tonnes to 793,000 tonnes). On the contrary, grindings for Ghana have been revised from almost 280,000 tonnes to 250,000 tonnes.
Other minor revisions have also been made for some countries of almost less than 5,000 tonnes in aggregate. Consequently, the global production deficit for the 2022/23 season is now estimated at 74,000 tonnes, compared with the previous estimate of 99,000 tonnes.
After two consecutive seasons of supply deficit, the Secretariat’s first forecast for the current 2023/24 season envisages a significant production deficit of 374,000 tonnes. This reflects that compared to the previous season, a substantial decline of ten percent (down by 547,000 tonnes) is expected in global cocoa bean production which is forecast at 4.449 million tonnes. There is a general view that the ongoing supply tightness especially in West Africa (which caters for approximately 70% of global supplies) originated from structural issues (aged trees, diseases, remunerative farm gate prices, climatic challenges, etc.) The low availability of cocoa beans has led to significant increases in cocoa prices. With the costs of raw materials increasing, this is likely to affect the operations of processors. Grindings are forecast to decline by 4.8% (down by 241,000 tonnes) to 4.779 million tonnes.
If realized, this would decrease the total statistical stocks of cocoa beans from 1.769 million tonnes in the previous season to 1.395 million tonnes at the end of the 2023/24 cocoa season, which is equivalent to 29.2% of projected annual grindings. Based on data available to the Secretariat, such low stocks-to-grindings ratio have not been witnessed in the last 45 years.
CÔTE D’IVOIRE
Côte d’Ivoire’s production is forecast at 1.8 million tonnes for the 2023/24 season, significantly lower than 2.241 million tonnes recorded for the previous season. The current crop is reported to suffer from unfavourable weather conditions and diseases. The season has experienced a slow start with port arrivals as at 18 February 2023 estimated to be down year-on-year by 32% to 1.128 million tonnes. Moving on it is unlikely that the mid-crop harvest will be sufficient to provide relief to the supply tightness for the ongoing cocoa season.
GHANA
Similar to Côte d’Ivoire, the main crop in Ghana depicts low supplies. Graded and sealed cocoa bean purchases by the Ghana Cocoa Board (Cocobod) from the official opening of the season in September 2023 to 31 January 2024 are estimated at 341,000 tonnes. On a year-on-year basis, this is 35% lower than for the same period of the previous season when purchases had reached 521,000 tonnes. For the ongoing season, production is expected at 580,000 tonnes.
Cameroon and Nigeria’s production are estimated at 300,000 tonnes and 270,000 tonnes respectively.
PRODUCTION
With Côte d’Ivoire and Ghana accounting for approximately 54% of global production, any issue with their production will ultimately have an impact on global output. Significant declines in production are expected from the top producing countries as they are envisaged to feel the detrimental effect of unfavourable weather conditions and diseases. Moreover, old trees in both countries are producing with lower yields.
At the regional level, as shown in Figure 4, with a forecast of 3.168 million tonnes, Africa is estimated to account for 71% of global production, followed by the Americas with a share of 23% or 1.035 million tonnes and Asia and Oceania at 6% or 247,000 tonnes.
AMERICAS
Production in Ecuador is estimated at 430,000 tonnes as farms with higher yields have had a significant impact on the country’s production. Brazil’s production is envisaged to be 220,00 tonnes. In Peru, cocoa is being harvested in more areas and as such production for the 2023/24 season is gauged at 160,000 tonnes. For the season under review, production in Colombia and the Dominican Republic is anticipated at 72,000 tonnes and 80,000 tonnes, respectively.
ASIA & OCEANIA
For the 2023/24 season, production is projected to be down at 160,000 tonnes in Indonesia due to unconducive weather conditions. Malaysia’s production is gauged at 500 tonnes and in Papua New Guinea, production is anticipated to remain similar to previous levels at 42,000 tonnes.
Global grindings are forecast at 4.779 million tonnes, 241,000 tonnes less than in the preceding season. Decreases are predicted for Europe (down by 4.1% to 1.710 million tonnes), the Americas (down by 2.6% to 913,000 tonnes) and Asia & Oceania (down by 5.2% to 1.063 million tonnes). Grindings for Africa are anticipated to fall down by 7.1% to 1.094 million tonnes (Figure 6).
Grindings in cocoa importing countries are projected to cater for 53% of global grindings. Statistics published by the European Cocoa Association (ECA) showed that cocoa grindings for the October to December 2023 quarter of the season under review fell by 2.5% from a year earlier to 350,739 tonnes. Data released by the Association of the German Confectionery Industry (BDSI) for the same quarter revealed that cocoa grindings fell by 2.1% year-on-year to 97,421 tonnes. Compared to the estimates for the preceding season, grindings in the Netherlands and Germany for the 2023/24 season are projected to decline from 600,000 tonnes to 590,000 tonnes and from 450,000 tonnes to 440,000 tonnes, respectively. For the fourth quarter of 2022, North American cocoa grindings as reported by the
National Confectioners’ Association (NCA) were down by 2.9% from the same period a year earlier to 103,971 tonnes. The Secretariat’s forecast for the United States for the 2023/24 season is 340,000 tonnes, while grindings in Brazil are expected at 253,000 tonnes.
The past few years have seen a pickup in origin grindings due to government policies of value addition to cocoa beans in exporting countries. However, the ongoing shortfall in production is envisaged to affect the processing activities of some exporting countries. For the current season, origin grindings are forecast to decrease to 2.337 million tonnes. This corresponds to 47% of total world grindings.
With a forecast at 750,000 tonnes for the 2023/24 season, it is obvious that Côte d’Ivoire will maintain its position as the world’s number one grinder. As the leader in global supply and processing, the Ivorian Le Conseil du Café-Cacao is reported to have taken steps to cater for the ongoing supply situation. These include a halt on the 2024/25 forward sales and a restriction on cocoa processors keeping stocks beyond set limits.
Grindings in Ghana are forecast to decline to 210,000 tonnes for the 2023/24 season. Though it is nothing new in Ghana, some companies are reported to have imported cocoa beans from neighbouring countries for their operations in the country.
GRINDINGS
For the 2023/24 season, grindings are anticipated to tilt downwards due to the high cost of cocoa beans which is likely to affect the operation costs of processors. For some time now, cocoa demand in developed economies has remained uncertain and processing at origin has been supporting the growth seen in global grindings. However, with the current supply tightness, grindings in both the traditional consuming regions and origin countries are likely to be affected. There is the possibility that consumers will witness an increase in chocolate confectionery prices or a reduction in the size of confectionery products i.e., “shrinkflation”.
Alexis Rubinstein
