Some rejections of Cote d’Ivoire beans on quality grounds have marred an otherwise promising start to 2019-20 for West African output, according to an International Cocoa Organization briefing which also highlighted strong Asian demand.
The intergovernmental group said that in Ghana, the world’s second-ranked cocoa producer, “favourable weather conditions partnered with the adoption of good sowing operations are supporting the development of the main crop”, after a 2018-19 harvest diminished by disease.
In Nigeria, “beneficial weather conditions reflect optimism for better production levels”, after a 2018-19 season when output was flat at 250,000 tonnes.
For Cameroon, the ICCO highlighted that “government programmes are improving production” - which soared by 30,000 tonnes to 280,000 tonnes last season, some 10,000 tonnes more than previously expected - while strong specifications are supporting prices for new season crop.
“Due to improved quality of beans, prices offered for the current 2019-20 season were estimated at 1,050 Central African francs ($1.77) per kilogramme for ordinary quality and 1,650 ($2.78) for premium quality”.
These prices represent increases of 31% and 83% respectively in local terms from last season, in both local currency and dollar terms.
‘Some beans likely to be rejected’
For Cote d’Ivoire, by a distance the world’s largest cocoa producer, the ICCO noted that arrivals of beans from producers to ports had, as of November 11, risen by 6% year on year to 446,000 tonnes for 2019-20, which started in October.
However, “some beans are likely to be rejected by exporters due to the high moisture content”, the organisation said, noting “unusually heavy rains that had negatively affected crop development and caused black pod disease to spread in some growing areas”.
The ICCO added that these conditions were now “reported to have eased”.
Port arrivals have over the past three weeks fallen behind year-ago levels, with Reuters on Monday reporting volumes as of December 1 at 694,000 tonnes, compared with 708,000 tonnes as of the same period of last year.
In South America, the ICCO also noted a continued decline in output in Brazil, where “the start of the 2019-20 season is witnessing weak arrivals as witches’ broom disease is affecting cocoa pods”.
This after a 2018-19 when output “dropped significantly” to some 176,000 tonnes, hurt by hot and dry weather in the key growing state of Bahia.
The organisation issued its comments as it expanded on revisions late on Friday which left the estimate for the global 2018-19 production balance at a negative 21,000 tonnes, compared with a previous estimate of an 18,000-tonne surplus.
The revisions reflected in part a downgrade of 15,000 tonnes to 4.83m tonnes in the estimate for global output last season.
The estimate for Ghana’s output was cut by 15,000 tonnes to 815,000 tonnes – taking to more than 150,000 tonnes the decline over two seasons.
“The outbreak of cocoa swollen shoot virus disease and unfavourable weather conditions during certain periods of the 2018-19 cocoa year had a devasting impact on the country’s cocoa production.”
The estimate for global cocoa grinding in 2018-19, meanwhile, was raised by 24,000 tonnes to 4.81m tonnes, reflecting increases for Asia, where the ICCO noted “steady growth in the demand for cocoa beans”.
Flagging data from the Cocoa Association of Asia showing a 14.7% surge in the Asian grind in the July-to-September quarter, the ICCO said that “the strong growth depicts the continuing high demand for cocoa products” in the region.
Malaysian grindings in 2018-19 were pegged at nearly 327,000 tonnes, some 27,000 tonnes above previous expectations, with the Indonesia grind upgraded by 14,000 tonnes to 504,000 tonnes.