Small surplus: ICCO releases first forecast for 2017/18 cocoa year

By Oliver Nieburg

- Last updated on GMT

Cocoa surplus of 105,000 MT predicted. ©GettyImages/alphaspirit
Cocoa surplus of 105,000 MT predicted. ©GettyImages/alphaspirit

Related tags Cocoa Icco Chocolate Grindings

The International Cocoa Organization (ICCO) predicts a small surplus for the current cocoa season, despite a projected decline in world production.

The organization – whose membership is comprised of governments in cocoa producing and consuming nations – expects a 105,000 metric tons (MT) surplus for October 2017–September 2018, the current cocoa year.

Dryness in West Africa

It anticipates 2017/18 global cocoa production will drop 2.3% compared to the last cocoa year to reach 4.64m MT.

It comes as Rabobank expects a “disappointing”​ mid-crop in West Africa as dryness and lower than average precipitation is leading to lower bean counts and smaller pod sizes in Côte d’Ivoire and Ghana.

Lower farm gate prices in Côte d’Ivoire may also have prompted a drop in fertilizer use and consequently yields, says the bank.

Rising grinds for growing chocolate market

ICCO predicts global grindings for the 2017/18 cocoa year will rise 2% to 4.49m MT.

This is roughly in line with recent retail value sales growth for chocolate confectionery, which rose 3.3% in calendar year 2017 to reach $102.5bn, according to Euromonitor International.

The previous cocoa year, 2016/17, ended with a surplus of 300,000 MT, as global production climbed 19% and grindings grew 7%, according to ICCO’s latest revised estimates.

Prices to recover, but only slightly

Cocoa prices on the London and New York markets hit a 10-year low in December 2017 of $1,917, according to ICCO’s monthly averages of daily prices.

This was the lowest level since October 2007.

Rabobank expects prices will rise marginally, but will remain lower than 2016 levels.

In its February Agri Commodities Monthly report, it said it expects first quarter 2018 cocoa prices to be around $2,200 per MT on the New York market.

The bank projects prices per MT on the New York market will be between $2,200 and $2,300 for the calendar year, while it expects London futures will trade for £1,560-£1,630 per MT over the same period.

It predicts a “more balanced” global supply and demand for the 2018/19 cocoa season.

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1 comment

choclare delight

Posted by sharon Gallant,

lets face we all like a fudge in are lives ever so often

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