According to market tracker barchart.com, cocoa prices also saw support from continued concerns about lower cocoa production in West Africa due to a lack of fertilizer. However, as this publication reported earlier this week, recent weather in cocoa-growing areas in West Africa has been generally favourable.
The International Cocoa Organization (ICCO) said the shortage of fertilizers on cocoa farms would likely hurt cocoa bean crop quantity, quality, and size next year – and that weather conditions and disease are negatively affecting cocoa production this year. Also, trade disruptions and high freight rates are impacting the cocoa and fertilizer trade.
Global cocoa demand for Q2 has been mixed. The Cocoa Association of Asia (CCA) reported 22 July that Q2 Asia cocoa grindings rose +3.6% y/y to 228,895 MT, a new record for the quarter and the second-highest grind in the history of the CCA. Conversely, the European Cocoa Association on 20 July reported that European Q2 cocoa grindings fell -2.5% q/q to 364,081 MT. The National Confectioners Association on 22 July reported that Q2 North American cocoa grindings fell -6.3% y/y to 115,899 MT.
The Cote d’Ivoire government reported Tuesday (9 August) that its cocoa farmers sent a cumulative 2.390 MMT of cocoa to the country’s ports from 1 October to 7 August, up +0.4% y/y.
In a ‘bullish factor’, barchart.com said last month Ghana reported that its 2021-22 cocoa crop fell by -35% y/y to 685,000 MT, the smallest crop in 12 years, due to drought and swollen shoot virus.
Ghana is the world's second-largest cocoa producer, behind Cote d’Ivoire. However, the Ghana Cocoa Board estimates 2022-23 Ghana cocoa production will rebound +31% y/y to 850,000 MT.
Recent reports on chocolate demand have also been mixed. Researcher IRI reported in July that the volume of chocolate products sold in the US dropped -1.5% y/y in the 13 weeks ended 12 June.
However, Barry Callebaut, the world's leading manufacturer of chocolate and cocoa products, reported last week that its global chocolate sales grew +9.1% in the first nine months of the fiscal year 2021-22 ended 31 May.
At the beginning of the year, the ICCO projected that global 2021-22 cocoa production would fall -by 5.2% y/y to 4.955 MMT from a record 5.226 MMT in 2020/21. ICCO estimates the global 2021-22 cocoa market will fall into a deficit of -181,000 MT from a surplus of +215,000 in 2020-21.