ICCO report shows increase in Ghana and Ivory Coast cocoa crops, but key export challenges persist
Cocoa farming in Ghana. Pic: Shutterstock
Latest figures from the International Cocoa Organisation (ICCO) have revealed crop production is on an upward curve, with 1.346 million tonnes of beans arriving at its ports, up 11.6% per cent year-on-year, yet key pressures remain in the wake of industrial action impacting exports, reports Neill Barston.
As the group explained, despite the increased yield, both countries, which account for the major bulk of the sector supplying the confectionery industry, have experienced key challenges against the backdrop of the cost of living crisis, and inflated costs of vital fertilisers.
Halfway through the 2022/23 main crop season, the ICCO noted that Ivory Coast’s exports of cocoa beans during the first two months of the 2022/23 cocoa year were undercut by 47% year-over-year from 186,842 tonnes to 99,950 tonnes. This was attributed to a carriers’ strike action at the port of San Pedro in November 2022.
Meanwhile, there were encouraging signs in Ghana, with purchases of graded and sealed cocoa beans for the 2022/23 crop year reached 350,000 tonnes as at 15 December 2022, up by a notable 76% increase compared to 199,000 tonnes purchased at the corresponding period of the previous season. However, as the ICCO added, while the arrivals and purchases from the top producers show ample supplies, as at the time of writing the absence of rain raised concerns over the possibility of the dry weather having an adverse effect on the outlook for the April – September mid-crop.
In terms of cocoa pricing, both the London and New York markets saw improved year-on-year prices, but set against a backdrop of wider inflation faced by agricultural workers, major concerns remain for the poor level of payment for farmers – whose pay in the region typically is less than $1 a day, well below UN poverty definitions.
As the ICCO noted, at the end of 2022, the annual average price of short-range contracts in London had increased by 7% compared to the previous calendar year as seen in Table. However, during the same period in New York, the average of the first position contract prices weakened by 1% year-on-year. Furthermore, the annual average of the US-denominated ICCO daily price stood at US$2,368 per tonne, down by 2% compared to the average price of the previous year. On the contrary, the average of the Euro-denominated prices increased by 9% year-over-year, attaining €2,249 per tonne in 2022.