Cocoa futures rose as ICCO cut its global output estimate

The price of cocoa futures ended higher on Thursday as the International Cocoa Organization (ICCO) slashed its production forecast for the 2021/22 season.

The US contract for December delivery increased by 2.34% to $2,366.00 per metric ton. Likewise, the cocoa London futures grew by 1.08% to $1,779.00 a metric ton, hitting a one-week high.

The commodity’s gains were driven by the ICCO’s September 01 report, cutting the 2021/22 marketing year’s global production forecasts from 4.92 million metric tons to 4.89 million metric tons.

Also, the organization raises its 2021/22 global cocoa deficit projection from -174,000.00 metric tons to -230,000.00 metric tons.

Adding to the price support is the lack of fertilizer for cocoa farmers in West Africa, risking a decline in cocoa yields in Ivory Coast and Ghana for 2023.

Besides, the ongoing geopolitical war in Ukraine has limited Russian exports of potash and other fertilizers globally.

Furthermore, the world’s second-largest cocoa producer next to Ivory Coast, Ghana, reported that its 2021/22 cocoa crop plummeted by -35.00% year-over-year to 685,000.00 metric tons. It is the smallest harvest in 12 years amid the drought and swollen shoot virus.

Chocolate and cocoa firms sharing farmer data

Meanwhile, the European Cocoa Association (ECA) and the Association of Chocolate, Biscuits, Confectionery Industries of Europe (CAOBISCO) agreed to share their farming data.

Both organizations stated that this data collection effort would lead into a combined database owned and driven by the producing nations.

The decision was made in compliance with the European Union’s national data privacy law, which is being reviewed to achieve a strong traceability system against deforestation.

The chairman of the ECA Sustainability Working group, the farm data collection is crucial in building a sustainable cocoa supply chain.