The International Cocoa Organization (ICCO) announced on Thursday an anticipated escalation in the global cocoa deficit for the ongoing 2023/24 season, with diminished production in key producers Ivory Coast and Ghana attributed to aging trees and disease.
In its quarterly update, the inter-governmental organization projected a deficit of 374,000 metric tons for the 2023/24 season spanning from October to September. This forecast aligns closely with a Reuters poll of analysts and traders conducted earlier this month, which had a median prediction of a 375,000-ton deficit.
ICCO estimates a 10.9% decline in global cocoa production to 4.45 million metric tons, coupled with a 4.8% reduction in grindings to 4.78 million tons for the same period.
The organization highlighted ongoing supply challenges in West Africa, a region accounting for approximately 70% of global cocoa supplies, stemming from structural issues like aged trees, diseases, and adverse climatic conditions.
Projections indicate that by the end of the 2023/24 season, cocoa stocks are expected to dwindle to 1.395 million metric tons, equivalent to 29.2% of projected annual grindings, marking a level unprecedented in the past 45 years.
Ivory Coast’s cocoa output for 2023/24 is forecasted at 1.80 million tons, down from the previous season’s 2.24 million tons, while Ghana’s production is expected to decrease to 580,000 tons from 654,000 tons.
The challenges in Ivory Coast and Ghana have contributed to soaring cocoa futures prices, reaching record highs.
The report also noted that grindings are likely to decline due to the elevated cost of cocoa beans, impacting processors’ operational expenses. This situation may prompt a potential increase in chocolate confectionery prices or a reduction in product sizes for consumers.