The International Cocoa Organization highlighted the increasing grip of Africa on the global cocoa sector as it hiked its forecast for the rise in world stocks of the bean, citing record production.
The ICCO lifted to 1.78m tonnes its forecast for world cocoa inventories at the close of 2016-17, taking to 382,000 tonnes the rise expected in stocks over the season.
The upgrade, from a previous estimate of a 264,000-tonne rise in inventories over the season, which ends in September, reflected in the main an increase in the global production estimate to 4.69m tonnes.
That figure, up 140,000 tonnes on the previous forecast, would be an all-time high, besides representing a bounce of more than 700,000 tonnes year on year.
The increase in production was in the main down to higher expectations for output in the two key West African producers, Cote d'Ivoire and Ghana, where harvest hopes have been buoyed by a rise in volumes of beans delivered to ports.
ICCO world cocoa forecasts 2016-17, change on previous, and (year on year
Production: 4.692m tonnes, +140,000 tonnes, (+720,000 tonnes)
Grindings: 4.263m tonnes, +21,000 tonnes, (+134,000 tonnes)
End-of-season stocks: 1.782m tonnes, +117,000 tonnes, (+382,000 tonnes)
Stocks-to-use ratio: 41.8%, +2.5 points, (+7.9 points)
"Ghana Cocoa Board has ruled out any significant impact of the army worm infestation on the output for cocoa… due to swift intervention measures put in place to curb the infestation," the organisation said.
The Cote d'Ivoire output estimate was lifted by 80,000 tonnes to 1.90m tonnes, although the ICCO flagged some potential for the midcrop harvest, which started in April, to disappoint.
The organisation noted talk "that the prevailing weather patterns - inadequate rainfall and hot weather conditions - in most of the cocoa growing regions in Côte d'Ivoire could result in the midcrop tailing off earlier than expected".
'Most dynamic country'
The upgrades lifted to 75% the proportion of world cocoa production stemming from Africa this season, up 2 points year on year.
And this comes at a time when a shift to encourage grinding in cocoa-growing countries, allowing them to capture more of the value of the processing chain, is increasing their importance on the consumption side of the balance sheet too.
"Origin grindings are forecast to increase in the current cocoa season," rising by 109,000 tonnes year on year to 1.91m tonnes, the ICCO said.
"Côte d'Ivoire is expected to be the most dynamic country engaging in processing activity with grindings projected at 550,000 tonnes."
By contrast, grindings in cocoa importing countries, such the US and the European Union nations, are "projected to rise slightly", by 25,000 tonnes to 2.35m tonnes.
The growing reliance on the cocoa industry on Africa, while a potential boost to the continent's wealth prospects, is viewed with unease by some commentators.
A strong focus of production on one region is viewed with concern for any crop, in raising the threat of weather upsets disrupting global supplies, but with West Africa seen as possessing raised political threats too, evident last month in military unrest in Côte d'Ivoire.
Cocoa futures for July fell in New York in early deals on Thursday, but a relatively modest 1.6% to $2,015 a tonne, giving back only part of their gains from earlier in the week.
"Cocoa prices had already fallen sharply," from Augst into early May, "in anticipation of a high supply surplus, with the result that the confirmation from the ICCO no longer weighed on prices," Commerzbank said.
By Mike Verdin