Cocoa price is on a downtrend following the ICCO’s monthly market report. The prevalent conditions in the key producers have further impacted prices. It is currently at a low last recorded in early August.
Production outlook
Cocoa price has been on a week-long decline as the market digests the recently released market report by the International Cocoa Organization (ICCO). The agency expects global production to increase by 10% in the next decade. During this timeframe, cocoa price is forecasted to rise by 25%.
Notably, grindings have increased significantly in North America, Europe, and South-East Asia. The Cocoa Association of Asia (CAA), European Cocoa Association (ECA), and North America’s National Confectioners’ Association (NCA) have had grindings rise by 4.1%, 8.7%, and 4.3% YoY respectively. Despite the increased grindings in Q3’21, “it was not enough to absorb the excess production.”
In the ensuing sessions, investors will also be keen on the prevalent conditions in key cocoa-growing areas within western Africa. In Ivory Coast, which is the leading producer of cocoa in the world, heavy rainfall has been recorded in recent weeks as harvesting commences. The resultant soil moisture is expected to boost the main crop associated with the October-March season. At this time of year, cocoa trees are usually heavy with pods and need adequate rainfall to get through the forthcoming dry season.
In Ghana, which is the second-largest producer of the commodity globally, the cocoa swollen shoot virus has resulted in a decline in production below 800,000 tonnes. According to the CEO of the country’s cocoa board (COCOBOD), Joseph Aidoo, about 20% of the cocoa-growing areas nationwide has been affected by the virus. The situation will likely provide some support
