CropGPT - Cocoa - Week 22

CropGPT - Cocoa

This week’s cocoa market summary provides a comprehensive overview of developments affecting global cocoa supply, pricing dynamics, and regulatory shifts, with a particular focus on West Africa, the United States, and global trade patterns.

• Ivory Coast: Cocoa shipments since October 1 have reached 1.6 million metric tons, marking a 9.6% year-on-year increase. However, this growth reflects a slowdown compared to the 35% increase seen in December. Concerns over bean quality have intensified during the mid-crop harvest, with up to 6% of truckloads composed of substandard beans—significantly higher than the 1% seen during the main crop. The decline is linked to irregular rainfall, which has adversely affected bean development.
• Ghana: Ghana’s cocoa production forecast has been revised down to 675,500 metric tons, a 5% reduction from previous estimates. This downward adjustment may place upward pressure on global prices due to anticipated supply tightening.
• Global Outlook: The International Cocoa Organization (ICCO) reported a substantial global cocoa deficit of 441,000 metric tons for the 2023–24 season, primarily due to a 13.1% decline in global production. However, projections for the 2024–25 season indicate a possible surplus of 142,000 metric tons, assuming a 7.8% rise in production, which could weigh on future prices.
• United States: Tariff developments have added volatility. A newly implemented 10% tariff on specific cocoa imports initially pressured prices, but subsequent court rulings have blocked several of these measures, easing New York cocoa contract premiums and leading to a softening of U.S. cocoa futures.
• Weather Conditions: Improved rainfall in West Africa has raised expectations for future harvests, though ongoing drought concerns in Ghana and Ivory Coast continue to pose a threat to production.
• Demand Trends: High cocoa prices and economic headwinds have weighed on major chocolate manufacturers, impacting forecasts and raising costs. Nevertheless, recent cocoa grinding data from North America, Europe, and Asia indicates stronger-than-expected demand, suggesting possible price stabilization if demand remains resilient.