ICCO offers key concerns over continued spike in vital crop fertilisers

The International Cocoa Organisation (ICCO) has warned that a significant spike in fertiliser prices is set to impact on cocoa harvests for the 2022/23 season, as farmers struggle to afford the cost of manage crops, reports Neill Barston.

Despite such an immediate challenge, the organisation had noted that at present growing conditions in West Africa have been largely favourable, additional cost burdens remain of key concern.

Significantly, this comes against a backdrop of prices remaining relatively low, placing farming communities under further pressure within the sector. For August 2022, first-month cocoa futures contract prices have fluctuated averaged $2,100 per tonne and ranged from $2,041 to $2,154 per tonne in London, while in New York the first position contract traded at an average price of $2,369 per tonne and ranged from $2,278 to $2,430 per tonne.

On the major issue of fertilisers, the ICCO, which highlighted that three types of fertilisers which are mostly used in cocoa farms followed an upward trend, they skyrocketed to reach their highest levels over the three-year period (January 2019 – March 2022). Notably, prices of di-ammonium phosphate (DAP) rose by 26% from US$747 per tonne in February 2022 to US$938 per tonne in March 2022. Meanwhile, the prices of urea and muriate of potash (MOP) soared by 22% from US$744 to US$908 per tonne and by 44% from US$392 to US$563 per tonne respectively.

As the ICCO asserted, the proper and sufficient use of fertilisers in cocoa farms is instrumental in the development of the crop in cocoa-growing regions, particularly in Africa where the botanical stocks of cocoa trees are aging, producing low yields, and prone to specific diseases, including swollen shoot virus.

Furthermore, the organisation explained that given the weak purchasing power of smallholding cocoa farmers, an increase in the prices of fertilisers is likely to lead to a reduction in their use, translating in the mid-to-long term, a decline in yields, quality and size of cocoa crops.

At the end of August 2022, total stocks of cocoa beans in the Exchange licensed warehouses are higher year-on-year on both sides of the Atlantic. Cocoa bean stocks in Europe Exchange warehouses are mainly of African origin, while in the United States, certified cocoa bean stocks are mostly from neighboring Latin American countries.


Related content

Leave a reply

Confectionery Production