Cocoa supplies likely to be down on last year, report

The main cocoa harvest in West Africa occurs between the period of October and May.

And Ivory Coast officials have said the spread of swollen shoot disease among plantations is likely to impact the country's full-year harvest.

The International Cocoa Organization predicted last month that global cocoa supplies could fall short of demand this year by around 18,000 tonnes. However, it anticipated a surplus next year of as much as 90,000 tons as a result of the recent high prices filtering down to the growers in both Ghana and the Ivory Coast.

Indonesian tax ​

Meanwhile, in Indonesia, the third largest global producer of cocoa, an export tax on the commodity introduced on 1 April is said to be under review by the finance ministry.

The body representing the country’s cocoa exporters, the Indonesian Cocoa Association, claims the tax will lead to Indonesia cocoa exports becoming less competitive than the other producer countries such as the Ivory Coast and Ghana, states local media reports.

The tax, which is aimed at encouraging more domestic processing of cocoa beans, will fluctuate depending on the average monthly cocoa futures price on the US market.

But the association said it has asked the government to delay the tax by six months, and added that it has been trying to renegotiate supply pacts with overseas buyers to minimise losses from the tax.

Cocoa demand​

World cocoa prices increased $9 to $3,040 a tonne yesterday. The commodity has experience price fluctuations in recent weeks with sharp declines noted, following on from the 33-year high they reached in December 2009 in London based on factors such as a poor main crop in West Africa and heavy speculative buying.

This month also saw favourable statistics for North American cocoa bean grindings, with data released by the US National Confectioners Association revealing a double-digit growth in the first quarter of 2010, the first gain since 2008.

NCA, a US-based trade association for the confectionery industry, last week reported a 16.17 per cent increase in cocoa grindings from the first quarter last year, totalling 116,122 metric tons.

This increase of 16,160 was higher than anticipated, although industry analysts had expected an increase on last year.

“The previous year was very, very low and because we were starting from a low base we were expecting a recovery for 2010,”​ said Laurent Pipitone, senior statistician at the International Cocoa Organization (ICCO). “What did come as a surprise, though, was that the increase was higher than the expected 10-12 per cent,”​ he told ConfectioneryNews.com.

The North American increase is in line with recent data from Europe, which again revealed a hike – albeit single-digit – in cocoa grindings. The statistics from the European Cocoa Association (ECA) revealed an 8.1 per cent rise in Europe in the first quarter of this year, which marked the biggest first-quarter gain for the region in four years.