No cocoa deficit
The International Cocoa Organisation (ICCO) has responded to numerous press reports over recent weeks identifying potential deficits in the supply of cocoa in the years to come by emphasising that its projections in no way support this view. Reports of a deficit, possibly reaching a level of one million tonnes in the year 2020, have been overstated in the extreme, it states.
In order to promote an informed assessment of the current situation and future prospects for the supply of cocoa to the chocolate confectionery market and to other cocoa ingredient applications, it has cited the following:
in the past 10 years, the cocoa market experienced five years with production surplus and five years with production deficit. The last cocoa season (2013/2014), just ended in September 2014, experienced a production surplus, with the two leading producing countries, Ivory Coast and Ghana, each posting record production
the price of cocoa beans has varied widely over the years and is currently below the historical (1850–2014) median level in real terms (adjusted for inflation)
cocoa production responds to changing price and therefore it cannot be assumed that, in the medium term (taking into consideration the lag between planting new trees and harvesting beans), demand will continue to grow and supply will either remain flat or decline. Cocoa, like any other agricultural commodity, is a renewable resource, so, when the cocoa price goes up, farmers will be incentivised to produce more cocoa beans by increasing their use of inputs and investing in new plantations.
As far as the ICCO’s current projections are concerned, there is no immediate cause for concern about the supply of cocoa for the next five years. There has been a tight relationship between supply and demand over the years and, while its projections show that supply deficits are likely to occur during the next several years, stocks of cocoa beans should cushion this development before production growth accelerates. There is no threat to the supply of cocoa for chocolate manufacture.
