Cocoa grinding will increase this season thanks to ample
bean supplies, but the fastest growth will be seen in producing countries, with
demand in traditional processing centres remaining stagnant the ICCO said.
In its first forecast for global cocoa supply and demand in
2016-17, the ICCO saw the market "bracing itself for a significant supply
"Compared with the previous season, this reflects an increase
in world production of almost 15%, to 4.552m tonnes.
Deficit bigger than
With grindings up only 3% year-on-year, a 264,000 production
deficit was forecast, somewhat higher than most analysts are expecting, with a
survey of expectations earlier last week forecasting about 250,000 tonnes.
If realized, the ICCO figures would grow cocoa stocks to a
hefty 1.67m tonnes, or nearly 40% grindings.
But the ICCO lifted its ideas of the 2015-16 supply deficit,
to 196,000 tonnes, compared to earlier estimates of 150,000 tonnes.
Demand is seen rising in reaction to falling prices.
"The outlook for processing activity during the current
season seems more favourable than during the two previous seasons," the ICCO
The ICCO forecast world cocoa grindings to rise by nearly 3%
to 4.242m tonnes in 2016-17, but the trend was sharply divergent, with
grindings in cocoa producing areas booming, while those in cocoa importing
countries remaining fairly flat.
African cocoa grinding is seen booming by some 8%, to
830,000 tonnes, while Asian grinding is seen up by nearly 5%, to 919,000
But grinding in Europe and the Americas is seen largely
unchanged, at 1.60m tonnes and in the Americas (at 890,000 tonnes).
"If the current fall in international cocoa bean prices is
sustained in the coming months, the price of finished cocoa and chocolate
products are expected to decline, thereby supporting consumption," the ICCO said.
"However, it may take time for the reduction in the cost of
the cocoa beans to be passed on to consumers," the committee said.
Massive West African
"In terms of its share of total world production, Africa is
expected to remain by far the largest cocoa-producing region, accounting for
74% of world cocoa output in 2016-2017," the ICCO said.
"For the current season, favourable weather conditions have
helped crops across the main cocoa-growing countries within the West African
region, representing a change from the previous year when strong, dusty
harmattan winds from the Sahara devastated cocoa production, in addition to the
impact of El Nino."
Cocoa output in Côte d'Ivoire is forecast at 1.90m tonnes in
2016-2017, up some 320,000 tonnes year on year.
The ICCO forecast total output for Ghana to reach around
850,000 tonnes in 2016-2017.
And cocoa production in Indonesia, the third-ranked cocoa
grower, was also seen rising to an estimated 330,000 tonnes.
But the ICCO said that "mixed weather patterns continue to
persist which could adversely affect the current season's production," driving higher
imports to meet local grinding demand, seen at 400,000 tonnes.