Saharan wind whips up cocoa supply fears

By Caroline Scott-Thomas

- Last updated on GMT

Troubles for West African cocoa supplies look set to continue following reports that the harmattan, a harsh, crop-damaging wind, has begun to sweep in from the Sahara.

Cocoa prices have gone up in recent weeks, and this latest threat to supply could see chocolate manufacturers looking to build stocks in anticipation of higher prices. The 2008/09 season has already been plagued by crop disease, disorganisation and political uncertainty in the Ivory Coast, causing prices to rise on concerns about the supply and size of its harvest.

The Ivory Coast is the world’s number one supplier of cocoa beans, producing 1.3 million tonnes last year, followed by Ghana – at 690,000 tonnes – which is also expected to be affected by the harmattan. Together, the two countries account for over half of the world’s cocoa production, which stood at approximately 3.9 million tonnes last year, according to FAOSTAT figures.

Delivery to ports

The harmattan is a dry, dusty wind which blows south from the Sahara into the Gulf of Guinea from December to March. It varies in strength and frequency, but usually carries large amounts of dust, and destroys crops by shrivelling buds and flowers.

With the rough weekly estimate of arrivals at Abidjan and San Pedro ports at 50,000 tonnes for the week December 1-7, down from 70,868 tonnes for the same week a year ago, its arrival is expected to exacerbate existing supply problems.

Arrivals of cocoa beans at ports have already tumbled as crop disease and disorganisation have affected delivery volumes.

Cocoa deliveries at Ivory Coast ports stood at 301,000 tonnes for the period October 1 to December 7, down from 530,044 tonnes at this stage in the season last year.

According to the International Cocoa Organisation: “This situation is partly due to farmers’ unions blocking deliveries of beans to ports as they demand higher prices but it was also the result of the higher incidence of black pod disease in cocoa farms.”

Cocoa prices

On the New York futures market, which serves as the international benchmark for cocoa, prices averaged $2067 last month. They had risen to $2286 by the close of trade on Monday, however, a rise of 15 per cent.

Although prices have fallen significantly since they cracked the $3000 mark back in June, the current level is still 16 per cent higher than the average for November last year, when they stood at $1966.

According to a Reuters report, analysts have forecast that cocoa supply will drop significantly by the end of January, which is expected to cause prices to climb further.

Related topics Commodities Cocoa Ingredients

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