ICCO Revises Global Cocoa Output for 2019-2020; 2020-2021
Commodities Network (Bogota) – The International Cocoa Organization (ICCO) has revised upwards the estimate for world production for the 2019/2020 cocoa season and the 202/2021 season.
The 2019/2020 has been slightly adjusted upwards by 2,000 tonnes to 4.728 million tonnes, compared with the data published in the previous issue of the Bulletin, ICCO said.
This is mainly due to minor revisions of the estimates for cocoa output from Africa (up by almost 4,000 tonnes), the Americas (down by 2, 000 tonnes) and a reduction of less than 1,000 tonnes for Asia. The estimate for world grindings has been increased by 2,000 tonnes to 4.671 million tonnes. The increase is distributed across Europe (up 25,000 tonnes), Americas (up 3,000 tonnes), Asia and Oceania (down by 19,000 tonnes) and Africa (down by 6,000 tonnes).
Meanwhile for 2021-2021, cocoa production is expected to reach 5.024 million tonnes in conjunction with a pandemic affected demand. Adjustments have been mainly applied to Côte d’Ivoire (up by 75,000 tonnes) and Ghana (up by 100,000 tonnes). Revisions amounting to 6,000 tonnes have been apportioned to minor producing countries.
“On the one hand, no significant adverse situations have been witnessed in the top producing regions. On the other hand, though demand for cocoa is expected to rebound as the negative effects of the pandemic on the demand for cocoa begin to wane, it is envisaged that demand will still be below pre-pandemic levels. Compared to the figure published in the previous issue of the Bulletin, the revised global production forecast is up by 181,000 tonnes to 5.024 million tonnes,” it noted.
PRODUCTION
The 2020/21 season has so far generally witnessed favourable growing conditions that bode well for cocoa production. As a result, a global record production is envisaged with a record production expected in Côte d’Ivoire and Ecuador.
At the regional level, production is expected to increase by 9% in Africa (up by 305,000 tonnes to 3.871 million tonnes), by 2.2% in the Asia and Oceania region (up by 6,000 tonnes to 278,000 tonnes) and to decrease by 1.7% in the Americas (down by 15,000 tonnes to 875,000 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.
Breakdown by countries
CÔTE D’IVOIRE The current weather conditions in Côte d’Ivoire are envisaged to improve the size and quality of the midcrop. The overall outlook for Côte d’Ivoire’s production remains optimistic with a forecast at a record production of 2.225 million tonnes. As at 9 May 2021, cumulative arrivals at ports were 1.879 million tonnes, up by 6.8% compared to 1.760 million tonnes recorded a year earlier. With the mid-crop farmgate price lowered by 9% from 1,000 CFA per kilogram to 750 CFA per kilogram (US$1.35), it is expected that sales of the country’s beans will improve compared to the low sales of the main crop which resulted in stockpiles of beans at farms and ports.
GHANA Production conditions in Ghana for the 2020/21 crop year, especially with regards to diseases have been less detrimental than in past years. In addition, the weather combined with the country’s Production Enhancement Program (PEP) has been greatly beneficial. Since the start of the season, cumulative graded and sealed cocoa were reported at 849,266 tonnes by 29 April 2021, thus corresponding to a 19.6% increase year-on-year. Compared to the previous season, Ghana’s 2020/21 production is anticipated to increase by 19% to 950,000 tonnes.
CAMEROON The spread of capsids is reported to be destroying cocoa trees in Cameroon despite efforts by farmers to apply pest control measures such as spraying of farms. However, as at the time of writing, the onset of rains is playing a crucial role in the removal of capsids. The production forecast for the country is 280,000 tonnes.
NIGERIA With the objective of making cocoa one of its flagship non-oil export revenue sources, efforts to augment the distribution of high yielding seedlings to farmers are benefiting Nigeria’s cocoa sector. Unlike its West African neighbours, Nigeria has witnessed much drier weather conditions. However, as at the time of writing, the rains have commenced with the hope that they will support the mid-crop. The forecast for Nigeria’s production is 270,0000 tonnes, representing an increase of 8% year-on-year
ECUADOR Although expectations point to a record production of 340,000 tonnes for Ecuador, poor rainfall levels have been witnessed in some growing areas. This is likely to slightly change the forecast production data – but record levels are envisaged to be attained.
BRAZIL On a year-on-year basis, cocoa arrivals in Brazil currently reflect a decrease of about 11%. A significant contributory factor to the decline is unfavourable weather conditions. In Brazil, data published by the Commercial Association of Bahia indicated that cumulative arrivals reached 57,000 tonnes at the beginning of May 2021, around 38% down (at 38,000 tonnes) compared with the corresponding period of the previous season. The ICCO Secretariat expects the country’s cocoa production to drop to 180,000 tonnes.
PERU Peru’s production has been experiencing considerable growth and is forecast at 150,000 tonnes for the 2020/21 season. Strategies focused on expanding and developing the country’s fine or flavour cocoa have provided impetus for the upward trend in production.
INDONESIA Indonesia’s production is forecast at 200,000 tonnes for the season under review. Although Indonesia is classified as a major producer of cocoa within the region, cocoa farms have been saddled with issues including poor weather, low yields and diseases. The announcement made by Mondèlez and Olam to create a 2,000-hectare sustainable commercial farm in Indonesia signals an interesting development for cocoa production in Indonesia.
PAPUA NEW GUINEA Papua New Guinea’s production is envisaged to increase to 35,000 tonnes. The strengthening of the private sector’s engagement with small local cocoa producers is encouraging and contributing to raising the interest in cocoa production, as the industry provides a ready market for cocoa beans.
MALAYSIA Production continues to remain at very low levels in Malaysia and is anticipated at approximately 1,000 tonnes for the season under review. With farmers switching to other competitive crops, the government’s aim is to restore confidence in cocoa farming. Thus, resources in the form of equipment, farm management, cocoa fertilizers among others are being channelled by the government to support cocoa farmers. With such initiatives, a future potential increase in production seems feasible.
GRINDINGS
The revised global grindings forecasts for the 2020/21 season are expected to rise by 3% to 4.809 million tonnes, recovering around 138,000 tonnes of the volume lost during the 2019/20 pandemic era. Acceleration of vaccine rollouts, easing of lockdowns resulting in a revival in consumer spending are evidence that a return to growth lies ahead. Increases are predicted for Asia and Oceania (up 5% to 1.156 million tonnes), the Americas (up 7% to 946,000 tonnes) and Africa (up 2% to 1.019 million tonnes). A decrease is expected for Europe (down almost 1% to 1.688 million tonnes).
Europe is predicted to account for the largest share at 35% of global grindings, followed by Asia and Oceania at 24%. The shares of Africa and the Americas are 21% and 20% respectively. Cocoa grindings in importing countries are forecast to rise by 3% from 2.521 million tonnes in 2019/20 to 2.596 million tonnes in 2020/21. Though global grindings are envisaged to regain a positive momentum, as at the time of writing, uncertainties surround the recovery trajectory in Europe. Data published by the Association of the German Confectionery Industry (BDSI) for the first quarter of 2021 revealed that cocoa grindings fell 8.1% year-on-year to 91,482 tonnes. According to the association, “even a year after the start of the virus, the number of grindings operations continues to decline”. Statistics published by the European Cocoa Association (ECA) showed that cocoa grindings for the first quarter of 2021 dipped by 3% from a year earlier to 357,815 tonnes. The drop has been linked to the pandemic-related restrictions which are still enforced in Europe but improving in other major cocoa consuming regions.
The Netherlands and France grind data are expected at 600,000 tonnes and 135,000 tonnes respectively for the 2020/21 season. The National Confectioners’ Association (NCA) reported that North American cocoa grindings increased in the first quarter of 2021 to 117,956 tonnes, up 2.05% from the same period a year earlier. The Secretariat’s forecast for the United States for the 2020/21 season is 400,000 tonnes, while that of Canada and Mexico are up from 70,000 tonnes to 90,000 tonnes and from 45,000 tonnes to 60,000 tonnes respectively. Europe 1,718 36% Africa 1,019 21% Europe 1,688 35% Americas 946 20% Asia & Oceania 1,156 24%
Origin grindings are forecast to rise by almost 3% in the current 2020/21 season, up by 63,000 tonnes to 2.213 million tonnes. This will result in the grindings share of cocoa producing countries in the world reaching 46%. In Côte d’Ivoire, grindings are expected at 620,000 tonnes for the season under review. Likewise, in Ghana, with an increase in production, processing activities are anticipated to rebound by almost 3% to 300,000 tonnes. Nevertheless, a concern which might slow the pace of processing in both Côte d’Ivoire and Ghana is the power outages occurring in both countries due to low water levels for hydropower and the upgrade of machinery by the electricity providers. The use of generators as alternative source of electricity is expensive and may result in an increase in the cost of processing activities. Thus, the likelihood of major processors in both countries moving their processing operations during this period to sister companies in other countries cannot be ruled out. In Asia, data published by the Cocoa Association of Asia (CAA) for the first quarter of 2021, showed a positive increase of 3.14% to 213,000 tonnes which represents a record first quarter grind data for Asia. Indeed, Asia is the moving force behind the recovery seen in global grindings. In Malaysia, grindings were up by 12% year-on-year to 83,000 tonnes in the first quarter of 2021 from 74,831 tonnes a year earlier. The Secretariat’s forecasts for Indonesia and Malaysia are expected to also record increases in grindings, up by 15,000 tonnes in Indonesia to 495,000 tonnes and up by almost 17,000 tonnes to 335,000 tonnes in Malaysia.
By Diana Delgado
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