Weather variations hit cocoa supplies, pushing up prices

According to barchart.com, the news that Côte d’Ivoire’s farmers shipped 2.29 MMT of cocoa from October 1 to July 16 (-2.6% y-o-y) is expected to increase future cocoa supply following news that Côte d’Ivoire’s cocoa forward sales volume from October 1 to July 7 in 2023-24 fell -1.3 MMT (-13.3%) y-o-y. He said he saw a “bullish” market with looming prospects and prices.

Côte d’Ivoire is the world’s largest producer of cocoa, and Reuters reported earlier in the week that the country had suspended the sale of cocoa export contracts for the 2023-24 season after farms were damaged and flooded in recent weeks of heavy rains.

The suspension would be a blow to a country that, according to the United Nations, relies on cocoa for 40 percent of its export earnings, with cocoa prices currently at record levels due to supply insecurity.

Eve Brahima Cohn, executive director of the Coffee and Cocoa Council (CCC), said sales had exceeded 1 million tonnes before the suspension. Total production for this season is expected to be 2.2 million tonnes.

Brahima Kohn told Reuters that the main cocoa harvest will start pouring into ports for export from October, and production is expected to drop significantly.

“The first part of the main harvest is expected to see significantly less cocoa production compared to this season. I hope that the production from January to March will balance the production volume, but if not, it will be a problem.‘ he said.

In the market, fears that El Niño could reduce global cocoa production are supporting cocoa prices. On June 8, the US Climate Prediction Center announced that sea surface temperatures across the equatorial Pacific were 0.5 degrees warmer than normal, and wind patterns changed to meet the El Niño standard.