In its Quarterly Bulletin of Statistics published on Friday, the ICCO estimated a 53,000 metric ton (MT) surplus for the 2013/14 crop year (Oct 13-Sept 14). In August, the organization had estimated a 40,000 MT surplus.
“This revision reflects adjustments due, inter alia, to the larger than expected mid-crop in Côte d’Ivoire and temporao crop in Brazil,” said the ICCO’s report.
Côte d’Ivoire to become largest grinder
ICCO’s report said that Côte D’Ivoire was set overtake the Netherlands as the world’s largest cocoa grinder next cocoa season after Olam’s new cocoa plant in San Pedro became operational in Q2 2014.
Cocoa grindings for 2013/14 rose 3% compared to the previous season driven by an increase in processing activity in Africa.
Cocoa processed in Africa was up 8% to 860,000 MT, while overall origin grindings rose 6%. Origin grindings now account for 45% of total global processing.
Indonesian grindings also soared 21% and the country overtook Malaysia as Asia largest cocoa processor.
Higher farmgate prices to encourage farmers
Global cocoa production reached a record high in 2013/14, surpassing the previous highest output from 2010/11.
ICCO cocoa estimates for 2013/14
Cocoa production - 4.365m MT (+11 on last crop year and highest on record)
Cocoa grindings - 4.268m MT (+3.4% on last crop year)
Origin grindings – 1.905m MT (+6% on last crop year)
Deficit/surplus – +53,000 MT
The rise was led by Africa, where cocoa production grew 12% compared to the previous season. Cocoa production also rose year-on-year in the Americas, but declined 1% in Asia & Oceania due to pest infestation in Indonesia.
In Côte D’Ivoire, the world’s premier cocoa producer, the Ivorian government has raised the minimum price paid to farmers to 850 CFA francs (US$1.64) per kilogram, up from 750 CFA francs for the 2013/2014 season.
“With the rising trend in farmgate prices, farmers are investing in their cocoa farms, and the position of cocoa farming as a profitable activity is being strengthened vis-à-vis alternative crops such as natural rubber,” said the ICCO.
Ghana has also raised the producer price paid to cocoa farmers to 5,520 Ghana cedis ($1,720) per MT, higher than the rate in Côte D’Ivoire to discourage cocoa smuggling.
‘Chocolate shortage’ reports
The ICCO recently issued a statement to quell media reports of a chocolate shortage.
The reports stemmed from a Bloomberg article that referred to Barry Callebaut and Mars’ earlier predictions of a 1m MT shortfall by 2020.
Barry Callebaut recently told this site that it no longer expected a 1m MT deficit, but still foresaw some shortfall.
The ICCO expects a deficit slightly under 100,000 MT for the next crop year, 2014/15, as production struggles to keep up with rising demand for cocoa in emerging economies in Asia and Latin America.