ICCO revises global cocoa harvests projections to highest ever world production levels
Cocoa growing community in Ghana, pic (Cargill)
The International Cocoa Organisation has revised its crop forecasts for the 2020/21 including overall levels of global cocoa harvests, with a record-high projection of 5.141 million tonnes now anticipated for world production volumes, reports Neill Barston.
As the Ivory Coast-based organisation’s latest quarterly bulletin notes, the pandemic triggered a shutdown of activities resulting in depressed commodity demand and supply disruptions, vaccination exercises have led countries to open and this is prompting a better outlook for commodities.
According to the ICCO, cocoa demand is seen to be recovering from the decline caused by Covid-19 trading conditions, as the reopening of economies (retail facilities among others) has contributed to an improved picture within the market – though a supply surplus has caused concerns among market observers over its potential impact on prices paid to key farming communities in Ghana and Ivory Coast.
For the current 2020/21 season, world production and grindings are projected to be higher than previously forecast. Compared to the figure published in the previous issue of the Bulletin, world production is forecast to attain a record level at 5.141 million tonnes (up by 117,000 tonnes). While the picture has been mixed in terms of demand for cocoa, consumers’ increasing desire for premium chocolate ranges has proved influential in world confectionery markets during the pandemic.
As the organisation added, global production surplus is now forecast at 230,000 tonnes, compared with the Secretariat’s earlier projection of a surplus of 165,000 tonnes. Total statistical stocks of cocoa beans at the end of the 2020/21 season should therefore increase to 1.963 million tonnes, which is equivalent to 40.4% of the projected grindings for 2020/21.
Confectionery Production recently reported on additional factors that have impacted on markets in Ivory Coast and Ghana in 2021, including government decisions early this year to reduce farm gate prices by 25% amid global price fluctuations amid the pandemic. Consequently, market observers have expressed concerns over whether the recently created Living Income Differentials payments of $400 per tonne paid to farmers will be effectively be wiped out, against a backdrop of broader efforts from government, major confectionery groups and civil society to deliver sustainability within the region’s vital cocoa sector.
Conditions within neighbouring Ghana have reportedly appeared more stable decade, with the country recently recording its largest harvest in a decade, at 965,493 metric tonnes in early June, with authorities seemingly having maintained payment levels made to farmers, which remains a core issue with many farmers gaining an income of below UN-defined poverty levels.