CocoaNetwork (New York) – The International Cocoa Organization (ICCO) has issued their latest forecasts for the global cocoa market.
PRODUCTION, GRINDINGS AND STOCKS 2019/20 AND 2020/21 ESTIMATES
Revisions to 2019-2020 Estimates
In line with the latest data available to the Secretariat and compared to data published in the previous Bulletin, the production estimate for the 2019/20 crop year has been revised downwards from 4.760 million tonnes to 4.735 million tonnes. A slight upward revision from 4.703 million tonnes to 4.707 million tonnes has been made for grindings. Regarding production, the main reason accounting for this revision is based on official statistics for Ghana’s production which has been revised downwards by 29,000 tonnes from 800,000 tonnes to 771,000 tonnes. The poor weather conditions in Ghana during the 2019/20 season took a heavy toll on the country’s production. Trinidad and Tobago’s production has been reduced from 500 tonnes to 300 tonnes while that of Papua New Guinea has been increased from 36,000 tonnes to 41,000 tonnes. Public-private partnership activities to enhance production are the key drivers of the uptrend in output from Papua New Guinea. World grindings have been revised upwards in connection with minor adjustments totalling slightly over 4,000 tonnes made to the grindings of Algeria (up by 200 tonnes), Estonia (up by 1,000 tonnes), Iran (up by almost 2,000 tonnes), Sri Lanka (up by 100 tonnes), Tunisia (up by 1,000 tonnes) and Trinidad and Tobago (down by 100 tonnes). Thus, compared with the data published in the previous Bulletin, the 2019/20 season is estimated to have ended with a global production deficit of 19,000 tonnes.
Revisions to 2020-2021 Estimates
For this issue, several revisions have been made to the 2020/21 cocoa balance sheet. On the supply side, the production estimate has been adjusted up by 34,000 tonnes to 5.175 million tonnes, almost 1% above what was presented in the previous Bulletin. A higher yield observed in most of the major producing countries underlined the upward revisions. Indeed, conducive weather conditions globally played a major role, although complimentary sectors such as shipping due to container shortages caused hitches to the supply of beans from origins. On the demand side, grindings have been adjusted higher by almost 51,000 tonnes to 4.911 million tonnes based on an increased use of beans as reflected in the trade of cocoa products.
The net effect of the above revisions is a global production surplus of 212,000 tonnes compared with the Secretariat’s earlier projection of 230,000 tonnes. The total statistical stocks of cocoa beans for the considered period are therefore estimated to have increased to 1.924 million tonnes, equivalent to 39.2% of the estimated 2020/21 grindings.
Production
At the end of the 2020/21 season, global cocoa production reached a historically high record. While the COVID-19 pandemic has had a minor impact on the harvest and the evacuation of beans from upcountry, strains on the maritime supply chains have been recorded as a result of delays and port congestion. This fuelled a surge not only in freight charges, but also in the price of farm inputs such as fertilizers or energy amongst others. At this stage however, it is not possible to quantify the overall costs and impact on the cocoa supply chain as a whole.
It is recalled that cross-border trade between major producing countries exists, but it is not possible to assess its size and flow direction. It is thus difficult to obtain an accurate picture of these flows, so production data for some individual countries presented in the Bulletin are based on cocoa beans purchased or reaching the ports of countries concerned or available exports data.
At the regional level, compared to the 2019/20 season, production is estimated to have surged in Africa by 456,000 tonnes (or almost 13%) to 4.005 million tonnes and in the Americas by 2,000 tonnes (or 0.2%) to 905,000 tonnes. Cocoa output in the Asia and Oceania region was scaled down by 18,000 tonnes (or 6%) to 265,000 tonnes. In terms of total world production, Africa accounts for 77% of world output, while the shares of the Americas and Asia and Oceania are likely to be 18% and 5% respectively.
AFRICA
Cote D’Ivoire
Based on official statistics, Côte d’Ivoire recorded exceptionally large crops for both crops of the 2020/21 season - with the main crop estimated approximately at 1.761 million tonnes and the mid-crop at 487,000 tonnes. This raised the country’s total production to 2.248 million tonnes, up by almost 7% compared to the previous season. Though rainfall was below average for optimal crop growth during the middle of 2020, heavy rains and sunny spells during the fourth quarter of 2020 provided good soil moisture content which supported the development of the main crop. Furthermore, unseasonal heavy rains mixed with sunny spells during the dry season supported the development of the mid-crop. As at the time of writing, the 2021/22 season has commenced with an increase in the producer price (825,000 CFA or US$1,467 per tonne) compared to the past mid-crop (750,000 CFA or US$1,350 per tonne). Though no adverse factors have been reported, registered arrivals are lagging behind that of the past season. Exporters have estimated that cocoa arrivals as of 7 November were approximately 410,000 tonnes against 445,000 tonnes for the corresponding period a year earlier.
Cameroon
Cameroon’s 2020/21 season is estimated at 290,000 tonnes. New areas of cocoa farming combined with conducive weather contributed to the increase in production. The Central region is reported to have contributed to about 43% of the total output and overtook the South-West region, affected by a socio-political crisis, as leader in cocoa production. An increase in Cameroon’s exports is the result of the efforts being made to improve the quality of cocoa beans produced in the country.
Ghana
Like Côte d’Ivoire, Ghana also logged a record production of 1.047 million tonnes for the 2020/21 season. This reflects an increase of 36% year-on-year. The substantial growth in output was due to conducive weather conditions and various productivity enhancement programmes adopted and implemented by the Ghana Cocoa Board which ranged from mass pruning, hand pollination, to the rehabilitation of farms affected by the cocoa swollen shoot virus (CSSV) among others. For the 2021/22 season, the cocoa producer price has been maintained from the past season at 10,560 GH cedis (US$1,769) per tonne. At the time of writing, Ghana’s graded and sealed cocoa arrivals as of 14 October were down to 10,951 tonnes from 14,168 tonnes at the same period of the previous season.
Nigeria
The introduction of improved seedlings and hybrid varieties in combination with good weather conditions supported cocoa production in Nigeria, which is estimated to have increased from 250,000 tonnes to 270,000 tonnes for the 2020/21 season.
Americas
Ecuador
Suitable weather and no significant adverse factors to cocoa production were reported during the season under review for the Americas. Ecuador’s production momentum continued throughout the season with an increase above 2% to 350,000 tonnes as compared to the preceding crop year.
Dominican Republic
Based on exports data which are similar to the previous season, production in the Dominican Republic remains flat at 75,000 tonnes.
Brazil
Based on data available from the Commercial Association of Bahia, production in Brazil is estimated at a level of 200,000 tonnes for the 2020/21 season.
Peru
In Peru, assistance including good crop management initiatives from the National Commission for Development and Life without Drug (DEVIDA) and local governments have played a role in the improvement of the output. Production is pegged at 150,000 tonnes for the season.
Asia and Oceania
Despite revitalization initiatives from the government and international agencies, dry weather and farmers switching to other crops were detrimental to Indonesia’s production which is estimated to be down to 180,000 tonnes. In Papua New Guinea, replanting and rehabilitation programs undertaken by districts, the Cocoa Board of Papua New Guinea in combination with development partners and private entities boosted production which increased to almost 42,000 tonnes. With not much change, cocoa production in Malaysia is estimated at around 1,000 tonnes.
Grindings
Notwithstanding the challenges brought on by COVID-19, the opening of economies worldwide in 2021 has stimulated the overall recovery observed in the 2020/21 season’s grindings. Cocoa grindings in 2020/21 are heading towards pre-pandemic levels – from an estimate of 4.707 million tonnes in 2019/20 to 4.911 million tonnes in 2020/21 which reflects a 4% year[1]on-year increase.
All regions witnessed a surge in grindings. Compared to the previous year, the Secretariat estimates that grindings increased in Europe by 2.4% to 1.748 million tonnes, in the Americas by over 7% to 958,000 tonnes, in Asia and Oceania by almost 5% to 1.160 million tonnes and in Africa by almost 5% to 1.045 million tonnes.
In importing countries, grindings are estimated to have increased by 4% (up 105,000 tonnes to 2.662 million tonnes) with significant increases in Germany, the Netherlands and the United States. For the third quarter of 2021, the German Confectionery Industry Association (BDSI) showed that grindings rose by 16.35% year-on[1]year to 108,615 tonnes in the country. A recovery in cocoa processing in Europe was confirmed by data published by the European Cocoa Association (ECA); grindings by its members rose by 8.7% to 375,811 tonnes for the period. The National Confectioners Association (NCA) reported that grindings in North America rose by 4.3% to 123,399 tonnes. The Secretariat’s 2020/21 grindings estimate for the Netherlands are estimated at 610,000 tonnes, followed by Germany and France at 450,000 tonnes and 135,000 tonnes respectively. The grindings for the United States have been increased by 5,000 tonnes to 385,000 tonnes and for Canada by 20,000 tonnes to 100,000 tonnes. For Asia, estimated grindings in Singapore rose by 5,000 tonnes to 95,000 tonnes.
The latest statistics reflect that there is an improvement in efforts by producing countries to move towards downstream products instead of just the sale of cocoa beans. Origin grindings are estimated to have increased by 3% to 2.217 million tonnes, accounting for almost 45% of global grindings in 2020/21. This is not surprising, as with rising freight costs and the need for processors to be near to the source of cocoa beans, processing in producing countries is gaining traction. In Côte d’Ivoire, Cargill completed a US$100 million expansion of the capacity of its processing plant in the country from 110,000 tonnes to 160,000 tonnes. Guan Chong is also reported to have commissioned a plant in the country to boost cocoa processing. For the 2020/21 season, grindings in Côte d’Ivoire are estimated at 620,000 tonnes. Grindings in Ghana reached a record high and are estimated at 322,000 tonnes (up by 10%). Efforts by the government to promote cocoa processing and consumption are bearing fruits. In addition to large scale processors, a rise in local artisan chocolate manufactures has been observed in Ghana. A substantial increase in grindings is estimated for Brazil – up by over 8% to 240,000 tonnes. Asian cocoa beans grindings also followed an upward trend. For the July – September 2021 quarter, data from the Cocoa Association of Asia (CAA) stood at 210,970 tonnes compared with 202,665 tonnes year-on-year. Thus, grindings in the main processing countries in the region – Indonesia and Malaysia – are estimated to be 490,000 tonnes and 338,000 tonnes respectively.
Alexis Rubinstein
