CocoaNetwork (New York) – The latest quarterly bulletin from the International Cocoa Organization (ICCO) was published today.
REVISIONS TO 2019/20 ESTIMATES
Compared with the data published in the previous issue of the Bulletin, the estimates for both world production and grindings for the 2019/20 season have been revised. World production is now estimated at 4.760 million tonnes, up by 32,000 tonnes in contrast with the data published in the last Bulletin. This has resulted from an upward revision of the estimates for production in Ecuador (up by almost 14,000 tonnes to approximately 342,000 tonnes) while based on exports data, figures for the Democratic Republic of Congo and Guinea have been revised upwards by 6,000 tonnes to 18,000 tonnes for each country. Papua New Guinea has also been revised by 6,000 tonnes to almost 36,000 tonnes.
In comparison to 4.671 million tonnes published in the last issue of the Bulletin, estimates for world grindings for the 2019/20 season have been revised upwards by 32,000 tonnes to 4.703 million tonnes. The main countries accounting for this change are the United Kingdom, Canada and Turkey who are up by 10,000 tonnes each to 80,000 tonnes, 80,000 tonnes and 100,000 tonnes respectively. Minor changes amounting to 2,000 tonnes have been made for other countries.
Previously estimated at 10,000 tonnes, the production surplus has now been adjusted to 9,000 tonnes.
REVISIONS TO 2020/21 FORECASTS
Though the pandemic triggered a shutdown of activities resulting in depressed commodity demand and supply disruptions, as at the time of writing, vaccination exercises have led countries to open and this is prompting a better outlook for commodities. Cocoa demand is seen to be recovering from the decline caused by the COVID-19 pandemic as the reopening of economies (retail facilities among others) has contributed to an improved utilization growth of cocoa. As far as cocoa supply is concerned, a record production is expected and a supply surplus is anticipated for the ongoing season.
For the current 2020/21 season, world production and grindings are projected to be higher than previously forecast. Compared to the figure published in the previous issue of the Bulletin, world production is forecast to attain a record level at 5.141 million tonnes (up by 117,000 tonnes). A major revision in production has been made for Ghana (up by 90,000 tonnes to 1.040 million tonnes. Cameroon and Ecuador have been adjusted upwards by 10,000 tonnes each to 290,000 tonnes and 350,000 tonnes respectively. Minor revisions totalling 7,000 tonnes have been allocated to other producing countries. Regarding world grindings, the upward adjustment results mainly from a revision in the level of processing activity in the Russian Federation (up by 12,000 tonnes to 72,000 tonnes), in Canada, Germany, the Netherlands and the United Kingdom (up by 10,000 tonnes each to 100,000 tonnes, 440,000 tonnes, 610,000 tonnes and 80,000 tonnes respectively). On the contrary, grindings in Ghana have been revised downwards (by 20,000 to 280,000 tonnes). Minor revisions totalling 19,000 tonnes have been allocated to other countries engaged in cocoa processing activities.
The global production surplus is now forecast at 230,000 tonnes, compared with the Secretariat’s earlier projection of a surplus of 165,000 tonnes. Total statistical stocks of cocoa beans at the end of the 2020/21 season should therefore increase to 1.963 million tonnes, which is equivalent to 40.4% of the projected grindings for 2020/21.
PRODUCTION
For the current season under review, most producing countries are recording ample supplies due to gains derived from good weather conditions in addition to undertaking production enhancement measures. Thus, production is foreseen to be up by 8% year-on-year to 5.141 million tonnes, primarily on the back of record supplies from the West African region. At the regional level, production is expected to be above the previous year’s levels by 11% in Africa (or 397,000 tonnes) to 3.975 million tonnes, and in Asia and Oceania slightly up by 1.1% (or 3,000 tonnes) to 281,000 tonnes. Production in the Americas is forecast to be down by 2% (or 18,000 tonnes) to 885,000 tonnes. In terms of its share of total world production, Africa is expected to remain by far the largest cocoa producing region, accounting for 77% of world cocoa output. The shares of the Americas and Asia and Oceania are likely to be 17% and 6% respectively.
AFRICA
CÔTE D’IVOIRE
With a forecast level of 2.225 million tonnes, Côte d’Ivoire would surpass the previous record of 2.2 million tonnes registered during the 2018/19 season. The country’s cumulative arrivals as at the start of the season to 8 August 2021 are seen to be 2.111 million tonnes, which is 5% above the level of 2.014 million tonnes for the same period a year ago. Supplies from new farmlands combined with good weather conditions have led to the upward trend being witnessed. Concerns have however been raised for a lower output for the next main season, as most farmers are expressing varying views on current weather conditions. In anticipation of a lower output lifting prices up (as exporters have currently been demanding heavy discounts for the country’s premium), this is likely to slow down the export sales contracts for the 2021/22 season. The reduction in the current farmgate price may also reduce farm investment which in turn can possibly have an impact on the next main crop output.
GHANA
Ghana is on track to witness its highest production in history which is anticipated at 1.040 million tonnes. The last highest production was logged for the 2010/11 season, when production reached 1.024 million tonnes. For the season under review, the significant rise of 30% year-on-year is largely attributed to the implementation of production enhancement programs. These programs include mass pruning, hand pollination, fertilizer application, rehabilitation of aged and disease-infected farms, as well as irrigation systems for cocoa cultivation. As at the time of writing, weather conditions are reported to be below average in some cocoa growing regions in the country. Should this continue, the likelihood of a lower output for the next season cannot be ruled out.
NIGERIA
Supplies from Nigeria are foreseen to increase as ample rainfall coupled with ongoing rejuvenation programs are resulting in yield increases. These programs include distribution of improved cocoa seedlings and application of recommended chemicals. Production is forecast to increase to 270,000 tonnes for the 2020/21 season.
CAMEROON
As a result of improving weather conditions and government assistance to the cocoa sector, Cameroon’s production has followed an ascending trend for the current season and is expected to reach 290,000 tonnes.
AMERICAS
In Brazil, data published by the Commercial Association of Bahia indicated the volume of cocoa beans produced as at the time of writing as 152,837 tonnes, about 17,000 tonnes (or 10%) lower than for the corresponding period of the previous season. Weather conditions have varied among the cocoa growing areas. In total, production in Brazil is expected to reach 180,000 tonnes in the current season.
Ecuador and Peru continue to scale-up their efforts in cocoa production. Thanks to government assistance to the cocoa sector, both countries will see an increase in this season’s output. Compared to the previous season, Ecuador is envisaged to increase by over 2% to 350,000 tonnes and Peru will almost equal the previous season’s level at 150,000 tonnes. Production in the Dominican Republic is anticipated to follow the same trend as the previous season and amount to 75,000 tonnes.
ASIA & OCEANIA
Cocoa production in the Asia and Oceania region is not expected to substantially change from last season. Government and private partnership measures continue to support cocoa production in the region. The production for Indonesia and Malaysia is projected at 200,000 tonnes and 1,000 tonnes respectively, while in Papua New Guinea production is projected at 38,000 tonnes.
Current prospects for world grindings point to a year of growth. Compared to the previous season, world grindings of cocoa beans are forecast to rise by 3.3% to 4.860 million tonnes for the season under review. The growth stems from an upturn in economic activity as cocoa demand is recovering from the decline caused by the COVID-19 pandemic in 2020.
Increases in grindings are expected in all regions. Based on a year-on-year growth rate, the Americas is forecast to take the first position, up by almost 7% (or 68,000 tonnes) to 961,000 tonnes, followed by Asia and Oceania with a 5% increase (or 56,000 tonnes) to 1.164 million tonnes. Steady progress is foreseen in Europe with an increase of almost 2% (or 28,000 tonnes) to 1.734 million tonnes and a 1% rise (or 5,000 tonnes) to 1.001 million tonnes in Africa.
In terms of shares of total grindings, Europe is predicted to account for the largest share at 36%, followed by Asia and Oceania at 24%. The shares of Africa and the Americas are estimated at 20% each.
