The International Cocoa Organization (ICCO) released its first forecast for the 2014/15 season last week and expects a supply and demand deficit of 17,000 metric tons (MT).
It follows a small surplus in cocoa year 2013/14 of 30,000 MT, according to latest estimates.
Dry weather in West Africa
Production declines of 3% are expected to drive the cocoa deficit for the current crop year.
Forecasts for 2014/15
Global cocoa production: 4,232m MT (-3%)
Global cocoa grindings: 4,207m MT (-1.7%)
Deficit: -17,000 MT (+30,000 MT in previous cocoa year)
African cocoa production is projected to be hardest hit, while output in the Americas and Asia & Oceania is anticipated to be relatively flat.
“The dusty seasonal Harmattan winds that blow southward from the Sahara Desert into West Africa from December to March were more severe than expected, while the dry hot weather conditions currently prevailing have been raising concerns for the mid-crop in the region,” said the ICCO in its Quarterly Bulletin of Cocoa Statistics.
Moderate choc demand to hit grindings
Cocoa grindings rose 3.5% in the previous crop year, but are expected to decline to 1.7% to 4,207 million MT in 2014/15.
“In the 2014/2015 cocoa season the outlook for grindings seems less favorable, as large stocks of cocoa powder, low processing margins and moderate growth of demand for chocolate weighs on demand,” said the ICCO.
Grinding are forecast to rise by 2% in Africa, but are expected to drop between 2-4% in every other region.