The cocoa price in New York fell to around US$2,250/ton last week, after the International Cocoa Organization forecast a larger than expected surplus.
The first forecast from the ICCO showed a supply surplus of 39,000 tons in the 2018/19 crop year that has been underway since October. As such, the surplus would be somewhat larger than expected. Commerzbank Research said the 2017/18 surplus was revised down to just 9,000 tons, however.
Global cocoa production is set to grow by 3.2 per cent in 2018/19 on the back of a considerably larger crop in Côte d’Ivoire.
“The growth will probably be somewhat more pronounced than deliveries so far have suggested,” said Commerzbank. “The ICCO envisages a robust mid-crop. By contrast, the crop in Ghana, the number two cocoa producer, looks set to decrease slightly despite shipments so far being well up on the previous year.”
Commerzbank said an expected 2.6 per cent growth in demand (grinding) is split more or less equally between the producer countries (+53,000 tons) and the import countries (+66,000 tons). Côte d’Ivoire leads the field in this respect, (+21,000 tons), followed closely by Malaysia (+19,000 tons).
Both countries grind cocoa beans primarily for export. As far as grinding is concerned, consuming countries – such as the US, Germany, the Netherlands and the UK – show slight increases of 5,000-7,000 tons.