ICCO revises forecast for increased global cocoa supply deficit

pic: Fairtrade

Posted: 8 June 2023

Related core topics: Business news, Cocoa & chocolate, Ingredients, Processing, Sustainability

Related organisations: ICCO

The International Cocoa Organisation has revealed that for 2022/23 cocoa year, supply deficit figures have risen from 60,000 to 142,000 tonnes, with pressure on global crops including adverse weather and availability of fertilisers, reports Neill Barston.

Despite the global body's latest assessment, it noted that production levels are predicted to increase by 3.4% for the 2023 season, while grindings are also set to improve marginally by 1.5% to 5.072 million tonnes.

As the ICCO noted, while this year's initial crop harvests appear to have brought some positivity to the market, actual yields are anticipated to be negatively affected by a looming El Niño as well as other factors including diseases which have historically impacted on the cocoa sector. As previously reported by Confectionery Production fertiliser prices have also increased significantly within core origin markets of Ghana and Ivory Coast, which has meant farmers in many instances have been unable to afford the price hikes, given that many agricultural workers are already earning less than UN poverty-defined payment levels.

Being a non-governmental organisation, the ICCO has continued the work it began in 1973, linked to the UN, operating within the framework of successive International Cocoa Agreements, and had until recently been based in the UK, before its relocation to Abidjan, Ivory Coast. It now has a total of 52 members, with 23 of them cocoa exporting nations representing 86% of international export trade within the sector.

In terms of cocoa grindings, the ICCO noted that recent efforts by top producing countries to move towards the downstream products instead of exporting raw cocoa beans, may be an influential factor. According to the organisation, cocoa processing has proved resilient in West Africa, which may have caused unintended adverse consequences such as comparatively low exports of bean supplies.

Another market development pointed out in its latest quarterly bulletin is the build-up of cocoa inventories at the exchange, despite the assurance of a supply deficit for the 2022/23 season. Certain possibilities alluded to the relatively high level of stocks at the exchange are mentioned.