The International Cocoa Organization underlined the growing importance
of West Africa on the cocoa trade as it ditched ideas of a world production
deficit this season, thanks largely to better-than-expected Ivory Coast output.
The ICCO, while nudging higher by 15,000 tonnes to 108,000
tonnes its estimate for the world production deficit last season, axed a
forecast of a shortfall at all in 2013-14, which ends next month, seeing instead
a 40,000-tonne surplus.
The revision from a previous estimate of a 75,000-tonne
deficit, reflected in the main "a larger-than-previously-estimated main crop in
Ivory Coast as well as in Ghana and a stronger anticipated mid-crop in Ivory
Coast", the organisation said.
Indeed, the "weak" occurrence of the Harmattan winds, which blows
hot and dry air in from the Sahara, in West Africa in its December-to-March
season "and the adequate rainfall interspersed with sunshine in April this
year, have been conducive conditions for a strong mid-crop", the ICCO said.
Ivory Coast record?
The group upgraded by 120,000 tonnes 1.73m tonnes its
forecast for output in Ivory Coast, the top producing country - on paper a
record high, beating the 1.511m tonnes reached in 2010-11.
"However, it should be noted that the 2010-11 figure significantly
underestimates the size of the harvest due to smuggling to neighbouring countries,
while the figure for 2013-14 may overestimate the current harvest due to
smuggling from neighbouring countries," the ICCO said.
ICCO 2013-14 cocoa estimates, change on last and (year on year)
Production: 4.345m tonnes, +183,000 tonnes, (+403,000 tonnes)
Consumption: 4.262m tonnes, 67,000 tonnes, (+151,000 tonnes)
Surplus: 40,000 tonnes, +115,000 tonnes, (+248,000 tonnes)
Stocks-to-use ratio: 38.9%, + 1.6 points, (-0.5 points)
"Taking this factor into account, cocoa harvested in the
2010-11 season may still remain the largest on record."
The estimate for neighbouring Ghana was lifted by 70,000
tonnes to 920,000 tonnes, and for Nigeria by 10,000 tonnes to 240,000 tonnes, more
than offsetting small downgrades to estimates for crops in Cameroon in Ecuador.
The estimate for world production was lifted by 183,000
tonnes to a record 4.345m tonnes, beating the previous high of 4.309m tonnes
set three seasons ago.
'Highest increase in
However, the ICCO also stressed the growing hold of Africa,
responsible for 73% of world output, on processing too, with the forecast for
grindings in the continent upgraded by 54,000 tonnes to 867,000 tonnes.
"Africa aims to register the highest increase in processing
activity of over 9%," the organisation said.
Again, Ivory Coast is expected to lead the way, with a jump
of 14% in volumes this season to 535,000 tonnes, and further growth expected in
"Ranked at number two this season, Ivory Coast is expected
to become the world's top cocoa processing country next season, with the
addition of the newly operating cocoa processing plant of Olam in San Pedro
since the second quarter of 2014."
Indonesia vs Malaysia
The ICCO also flagged the improving fortunes of Indonesia's "booming"
processing sector, which is expected to grind 315,000 tonnes of beans, 20,000
tonnes more than previously expected.
The organisation highlighted that the country's government "has
been considering removing import duty on cocoa, and thereby facilitating the
importation of cocoa beans to feed Indonesia's growing processing demands".
By contrast, Malaysian volumes were estimated at 260,000
tonnes, a downgrade of 15,000 tonnes, "as the intense competition for cocoa
beans from Indonesia takes its toll on the former's processing activities".