Cocoa deficit to be deeper than prior estimates, ICCO Says

On September 2, 2024, 7:45 AM

Cocoa’s shortage is set to deepen further this season amid persistent production challenges from poor weather and disease.

Demand will exceed production by 462,000 metric tons, the International Cocoa Organization said in its third estimate for the current year that started in October. That figure is 5.2% more than the organization’s May forecast of a 439,000-ton deficit, which itself was a larger shortfall than its original outlook in February.

Global supply remains low as a result of “adverse weather conditions, aged trees, pests and diseases that affected production in major cocoa areas during the season under review,” the ICCO said in a Friday report.

Production for the season is seen at 4.33 million tons, 2.9% below ICCO’s earlier estimate, while grindings are expected to be 2.1% lower at 4.75 million tons.

New York futures are up around 80% this year as poor harvests in West Africa curbed supplies, though prices have pared back from record highs. The region’s cocoa industry is still grappling with lasting issues like crop disease, and new trees take at least three years to reach fruit-bearing maturity. That’s constraining how quickly production can ramp up to ease the shortage.