Cocoa prices reach 12-year high on New York markets, as farmers face ongoing major challenges
Pic: Cocoa farming in Ghana. Pic: Shutterstock.
Cocoa commodity prices on the New York stock exchange have continued to peak, reaching a reported 12-year high, to $3,640 a tonne in the US this month, amid notable pressures with a supply deficit prompting wider industry concerns, writes Neill Barston.
As previously reported by Confectionery Production, the latest situation in America comes just weeks after crop prices in London markets were said to be at 46-year highs, with issues relating to a shortfall in supply of quality beans, as well as challenging weather conditions including El Nino winds within West Africa, and elevated costs of fertilisers also proving key issues.
This was reflected in the latest revised forecasts from the International Cocoa Organisation (ICCO), which highlighted a picture for the 2022/23 season is contending with “faltering production, growth in demand and relatively high prices”.
Moreover, it observed that world gross production of cocoa increased its forecasts, from 4.826 million, to 4.93 million tonnes forecast for the complete 22/23 season, up 112 tonnes (2%), with estimates for grindings also up from 4.94 million tonnes, to just over 5 million tonnes (up 0.2%), providing some optimism for the market.
As the ICCO observed, the turnaround in grinding activities in origin countries has supported the growth in global grindings. Nevertheless, it noted that this was not enough to offset the negative grindings in the traditional consuming regions.
An observation pointed out in the Bulletin is that there are more exports of semi-finished products from top producing countries to Europe, Southeast Asia and North American Free Trade Agreement (NAFTA) countries. Cocoa prices, in turn, have garnered more support from the combination of the current cocoa supply and demand situation and are hovering at high levels.
Significantly, Ghana’s Cocoa Board, which oversees cocoa production in the key West African nation, and be represented at our World Confectionery Conference on 5 October at the Harrogate Convention Centre with a keynote speaker appearance from Hon Joseph Aidoo, has just confirmed that it is bringing forward the next crop season in a bid to provide additional support for its farmers.
Crucially, the delivery of a living wage for cocoa farmers remains at the core of the industry’s main challenges beyond climate issues, with governments in Ivory Coast and Ghana both pushing to deliver gains for agricultural communities with the recent introduction of the Living Income Differential premium payment of $400 a tonne on crops. While this has been largely welcomed across the sector, issues have arisen amid pressure on farmers in terms of their immediate operating costs, with prices for fertiliser and equipment proving in many instances, prohibitively expensive at present.