On Thursday, cocoa prices increased moderately after reports of poor harvests in the Ivory Coast, the world’s largest cacao producer.
US cocoa March futures closed 1.280% higher at $4,043.00 per metric ton (MT) on November 16. Furthermore, analysts forecast an additional lift of 0.12% to $4,048.00 per MT in the upcoming session.
The Republic of Côte d’Ivoire reported cacao exports of 348,560 MT from October 01 to November 12. Remarkably, the data noted a sharp drop of -25.30% year-over-year for shipments of the soft commodity.
Cocoa inventories held in US ports have consistently declined since June, reaching a 30-month low on Thursday. The New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE) agree that a global deficit seems inevitable.
Ghana, number two in global cacao output, also anticipates a sharp harvest drop for the remainder of the year. Ghana’s Food and Agriculture Organization (FAO) said the country’s cocoa production may hit a 13-year low of 683,000 MT.
Hence, the total production for the 2022/23 crop season will fall by -24.00% from initial estimates of 850,000 MT. FAO cited the spread of the black pod disease and a lack of fertilizers as the main drivers for the shortage.
Lastly, the other cocoa-producing nations anticipate lower yields due to the El Niño weather event. The US Climate Prediction Center (CPC) said sea surface temperatures in the Pacific Ocean have risen 0.50 degrees above average.
Ivory Coast Farmers Face Trials in Growing Cocoa
Recent extreme rainfall in West Africa aided the spread of the black pod disease across the region. The illness turns cacao pods black and causes them to rot, reducing the yield and quality of each harvest.
In addition, Ivory Coast cocoa producers have yet to find a solution to the cacao swollen shoot virus (CSSV). CCSV gradually weakens the crop, resulting in decreased yield, eventually killing the crop within a few years.
It is transmitted by various species of mealybugs that suck the sap of cacao trees for sustenance. Uprooting the infected cacao and its neighboring trees is the only way to control the virus.
According to Tropical Research Services (TRS), the swollen shoot virus has infected approximately 20.00% of the Ivory Coast’s cacao trees.