The International Cocoa Organisation (ICCO) has forecast an increased global cocoa deficit in the current 2023/24 season as aged trees and disease contribute to a drop in production in top growers Ivory Coast and Ghana.
In a quarterly update, the inter-governmental body predicted a global deficit of 374,000 metric tonnes in the 2023/24 season (October-September).
The forecast was in line with a Reuters poll of analysts and traders issued earlier this month which had a median forecast of a deficit of 375,000 tonnes.
The ICCO forecast that global production would fall by 10.9% to 4.45 million metric tonnes with grindings declining by 4.8% to 4.78 million.
The ICCO estimated there was a global deficit of 74,000 metric tonnes in 2022/23.
Supply Tightness
'There is a general view that the ongoing supply tightness especially in West Africa (which caters for approximately 70% of global supplies) originated from structural issues,' the ICCO said, referring to issues such as aged trees, diseases and climatic challenges.
The ICCO forecast that stocks at the end of the 2023/24 season would fall to 1.395 million metric tonnes, which is equivalent to 29.2% of projected annual grindings, a level not witnessed in the last 45 years.
Ivory Coast was seen producing 1.80 million tonnes in 2023/24, down from the prior season's 2.24 million, while Ghana's output was seen falling to 580,000 tonnes from 654,000 tonnes.
Poor crops in Ivory Coast and Ghana have helped drive cocoa futures prices CCc2, LCCc2 to record highs.
"Grindings are anticipated to tilt downwards due to the high cost of cocoa beans which is likely to affect the operation costs of processors," the report said.
The ICCO said there was a possibility that consumers would see an increase in chocolate confectionery prices or a reduction in the size of confectionery products.
