On Tuesday, cocoa prices increased due to concerns about Ghana’s plan to ration supplies, driven by doubts about the crop’s recovery.
US cocoa futures for September delivery jumped sharply by 7.48% to $8,264.00 per metric ton (MT) on July 23’s Asian afternoon session.
Recently, commodity prices have been undercut amid better-growing conditions in West Africa. According to forecasts, rain in several growing regions would maintain the soil’s favorable moisture for plant growth.
Chocolate’s primary ingredient prices gained underlying support from concerns about the availability of beans for buyers.
According to reports, Ghana is planning to postpone the shipments of around 350,000 MT of cocoa beans to next season. On the other hand, the Ivory Coast regulator mentioned that companies that do not own processing plants cannot purchase from the mid-crop.
On July 11, it allowed forward sales to continue for the 2024/25 cocoa crop to buyers with domestic processing plants.
Moreover, worries about the West African mid-crop, the smaller of the two yearly harvests, boosted prices. Ghana’s crop is anticipated to be cut to 25,000 MT, more than the earlier forecast of 150,000 MT.
The Ivory Coast expects its mid-crop to decline by -33.00% to 400,000 MT from 600,000 MT last year. Ghana’s Cocoa Board also said that its 2023/24 harvest would only reach 425,000 MT, half its initial outlook due to a crop-damaging disease.
Ghana’s Cocoa Faces Swollen Shoot Disease
Ghana, the second-top cocoa producer globally, is struggling with a severe production crisis amid the outbreak of swollen shoot disease. As a result, concerns were raised about its possible impact on global prices, which recently surged.
According to the International Cocoa Organization (ICCO), 81.00% of the critical planting area in West Africa is infected with the virus.
The swollen shoot disease significantly impacted prices, which almost doubled due to unfavorable weather conditions.
Initially, there were hopes of better yields in the coming season. However, swollen shoot disease cast doubt on the crop’s optimism.
