The main cocoa crop in Côte d’Ivoire, the season for which runs from October to March, is expected to be as large as last year’s crop, making the overall crop a record-breaking one.
Commerzbank Research said that, thanks to good weather in recent weeks, respondents to a survey estimate the 2019/20 main crop at around 1.7 million tonnes, compared with the 1.58 million tonnes estimated in July. The figure achieved last year was 1.66 million tonnes.
Together with the mid-crop that has been underway since April, Ivorian cocoa production is set to reach a new record of 2.22 million tonnes in 2018/19, according to the International Cocoa Organization (ICCO). This would equate to almost half of global production.
However, Commerzbank said the situation “isn’t nearly as positive everywhere, however.”
It said that, in Ghana, the second-largest producer country, diseases are having a significant impact on production, which is partly why the ICCO, at the beginning of September, halved its estimate of the surplus on the global cocoa market in the 2018/19 season to 18,000 tonnes.
This boosted the cocoa price, as did declining cocoa stocks on the exchange in New York. The price surged by almost 10 per cent compared with its level at the beginning of September, although improved prospects for the Ivorian crop in 2019/20 dampened the price a little.
“There is considerable uncertainty on the cocoa market at present about how the premium of US$400 per tonne that will have to be levied on the exchange price from October 2020 will affect pricing,” Commerzbank said.
“The premium is intended to improve living conditions for producers. Ultimately, however, it is questionable whether both countries, despite jointly accounting for a large proportion of global production, will be able to persuade customers to meet these extra costs, or to what extent buyers might switch to other suppliers.”