Harvest pressures in Cote d’Ivoire are also undercutting cocoa prices after government data earlier this week showed that the country’s farmers shipped 284,633 MT of cocoa to ports from 1 October to 27 October , up +26% from 225,698 MT shipped the same time last year.
Cote d’Ivoire is the world's largest cocoa producer, and Cocoa prices were undercut when its regulator Le Conseil Cafe-Cacao on Oct 18 raised the country’s 2024/25 cocoa production estimate to 2.1-2.2 MMT from a June forecast of 2.0 MMT.
Still, Cocoa prices rallied sharply on Wednesday (30 October), barchart.com reports, and continued to recover from last week's lows when NY cocoa posted an eight-month nearest-futures low and London cocoa posted a three-week low.
Anthony Myers
In its latest bulletin, bartchart.com states that cocoa prices are supported by heavy rain in some areas of Africa's cocoa-growing region, which obstructed access to fields and fostered cocoa disease.
Shrinking global cocoa stockpiles are bullish for prices. ICE-monitored cocoa inventories held in US ports have been trending lower for the past 17 months and fell to a 19-year low last Friday of 1,820,736 bags.
JP Morgan analysts also predict a cocoa deficit of 100,000 MT in the 2024-25 marketing year, tighter than its previous forecast of a neutral balance and the market consensus for a small surplus. "We maintain our view of structurally higher cocoa prices for longer, amind supply-side constraints and firm demand,” it said in a note.
In August, Cameroon's National Cocoa and Coffee Board reported that in 2023-24 (July), Cameroon cocoa production rose +1.2% y/y to 266,725. Also, Nigeria's August cocoa exports rose by +6.8% y/y to 14,984 MT. Nigeria is the world's sixth-largest cocoa producer.
Cameroon cocoa
The Business in Cameroon website reports that according to forecasts by the Bank of Central African States (BEAC), Cameroon's cocoa production for the 2024-2025 season is projected to reach 276,900 tons. This represents an increase of 8,000 to just over 10,000 tons compared to the previous season.
Despite this slight increase, Cameroon's national production has stagnated and remains under 300,000 tons, half the 600,000-ton target set as part of a cocoa-coffee sector recovery plan.
The plan also aimed to process 50% of the cocoa beans locally, but Business in Cameroon says this goal is still out of reach. “Many processing units that have been established struggle to operate at full capacity due to the limited availability of beans, slowing efforts to add value within the country’s cocoa sector.”
Cost to consumers
Higher prices of raw materials like cocoa mean consumers can also expect to see chocolate and candy becoming more expensive at Christmas. Michelle Buck, chairman, president, and CEO of The Hershey Company said: ''We have experienced historic cocoa prices for some time now. Our approach to the pricing has been to take a measured approach.
"We've absorbed a lot of inflation already, but we do believe we need to pass some of it on, and we're seeing the category hold up fairly well in this tougher environment. We think it's historically rational and will continue to be."