Ghana and Ivory Coast, the world’s top cocoa producers, are currently in the dry season, when rainfall is scarce. However, farmers have welcomed the recent rainfall, which is expected to finish the main crop from October to March strongly with good quality beans.
“It is rare for this level of water to exist during the dry season. This will help the middle crop grow well,” Jean Boua told local media. He farms near the eastern region of Abengourou, where 19.5 millimeters (mm) fell last week, 16 mm above the five-year average.
“There are still plenty of large pods on the trees and the mid crop looks good,” Claude Attesse, who farms near Bongouanou, where 7.6mm of rain fell last week, 5.8mm above the five-year average, told Reuters.
In neighboring Ghana, unseasonal weather will also help boost its mid-crop to a strong start and in the commodities market, cocoa prices have started to ease, according to the latest data from ING commodities strategists. In their latest update, analysts said cocoa futures fell to their lowest level since mid-November earlier this week on the prospect of better weather in Africa.
Analysts said cocoa trees suffered from the Harmattan season (which runs from late November to mid-March. Rainfall forecasts in Ghana over the next few days may also be helpful, ING said in its update.
Demand for cocoa
In its final 2023 bulletin, the International Cocoa Organization (ICCO) said the 2022-23 season was mainly characterized by a reduction in supply from the two main producing countries and ended with a global production deficit.
“With the current 2023-24 season also expected to end with a global production deficit, market participants continue to weigh the situation of successive supply shortfalls.,
“In this context, several revisions have been made to the 2022-23 cocoa balance sheet. On the supply side, the production estimate has been revised upwards by 15,000 tonnes to 4.953 million tonnes, compared to the 4.938 million tonnes estimated in the previous release.,
“As cocoa bean milling is an indicator of cocoa demand, the continued decline in quarterly grinding figures published by major regional cocoa associations during the 2022-23 season, compared to the previous year, suggests a slowdown in cocoa demand.”,
On the demand side, ICCO said milling was revised up to 5.002 million tonnes from 5.005 million tonnes in its previous Bulletin.
- March London cocoa LCCc1 fell 113 pounds, or 3.2%, to 3,381 pounds per metric ton, after hitting a two-month low of 3,331 pounds.
- Traders said technical indicators turned bearish after breaching key support levels, while unusual rainfall in most of Ivory Coast was expected to boost crop prospects in the world’s top producer.
- Cocoa arrivals at Ivory Coast ports had reached 873,000 tonnes by January 7 since the season started on October 1, down 35.2 percent from the same period last season.
- March New York cocoa CCc1 fell $110, or 2.6%, to $4,094 a tonne.
source: nasdaq.com – January 8, 2024,