The ICCO previously forecast a 60,000 metric ton (MT) supply and demand shortfall for the crop year (Oct 12-Sept 13).
That deficit has now been cut to 52,000 MT as world production is projected at 3,986m MT and world grindings at 3,998m MT.
Stocks available this year
Laurent Pipitone, director of the ICCO's economic division, told ConfectioneryNews: “Because there are large stocks of cocoa in the market it will not be an impact for chocolate manufacturers.”
The ICCO recently estimated that last year’s crop yielded more than previously, creating a 87,000 MT surplus – which is enough to cover this crop year’s deficit.
…But next year’s deficit to impact prices
The ICCO has yet to publish forecasts for the 2013/14, but Pipitone said he expects another small cocoa deficit.
“If there is a deficit next year, this will have an impact on prices,” he said.
Cocoa prices this year have been falling, but have risen slightly in recent weeks because of an expected deficit next crop year due to lack of rainfall.
Pests and diseases in Indonesia
Around 70% of the world cocoa is grown in West Africa with the Ivory Coast and Ghana the largest producing nations.
Indonesia is the third largest producer, but forecasts there are pessimistic.
“They have had a problem with pests and diseases,” said Pipitone.
Major investments have been made to tackle these problems, but the economics director said it would take time since the country was so large.
“We expect grinding to increase next year. Demand is increases in emerging markets for cocoa and chocolate and the economic situation in developed markets is improving.”
Indonesia’s rapid grind growth
“Processing activity in Indonesia has surged in recent years.”
Around 270,000 metric tons (MT) of cocoa were processed in Indonesia in 2012/13, up 28% per year for the past three years, making it the sixth largest grinding nation.
Cocoa processing in the country is expected to grow further as Barry Callebaut this week opened 30,000 MT facility in Makassar and Cargill constructs a 70,000 MT plant in Gresik due for mid-2014.