As demand continues to outstrip supply, the world price of cocoa was more than 12 per cent higher at the end of last week compared with a year ago, according to the International Cocoa Organization (ICCO).
The ICCO daily prices for cocoa beans reached US$3196 per tonne on Friday June 11, up 12.3 per cent on the price a year ago. The value is calculated from the average price of the quotations of the nearest active futures trading months on NYSE Liffe (London) and ICE futures US (New York) markets.
An ICCO spokesman told ConfectioneryNews.com: “Cocoa prices have been following an upward trend since about October 2006 due to cocoa supply deficits. Some chocolate companies have modified their recipes, including less cocoa, and/or reduced the size of the portions and/or increase the price of the products.”
The ICCO Secretariat envisages a supply deficit of cocoa beans of 69,000t for the current 2009/10 cocoa year running between October 2009 to September 2010. That compares with a forecast deficit of 18,000t predicted last March.
Plus cocoa bean stocks are forecast to fall to 1.619m tonnes by 30 September 2010. That represents almost 45 per cent of the demand for cocoa beans or more than five months of stocks.
Adding to short-term supply worries are fears that the quality of production from Ivory Coast and Ghana, the world’s two largest producers, could be hit by high moisture contents.
Too much moisture, following high rainfall, could cause mold in the crop which would adversely affect quality, according to trade sources.
Production in Ivory Coast, the world’s largest producer could also be affected by a viral disease. Growers’ representatives have asked for government help in combating swollen-shoot disease which can be controlled only by burning infected trees.
Meanwhile, the ICCO’s latest review of the cocoa market, its Quarterly Bulletin of Cocoa Statistics published in May forecast world production of cocoa beans to remain practically unchanged in the 2009/2010 cocoa season with output up by 3,000t to 3.596m tonnes; a rise of 0.1 per cent compared to the previous season.
But production is expected to fall by 2 per cent in Africa; down by 51,000t to 2.469m tonnes. Africa is expected to remain by far the largest cocoa producing region, accounting for almost 69 per cent of world cocoa output in 2009/2010.
Ivory Coast's cocoa output is forecast to fall to 1.190m tonnes in 2009/2010, nearly 3 per cent lower than the 1.223m tonnes production recorded for the previous season. Lower production is attributed to lower than normal rainfall during the summer of 2009.