The drastic decline in Ghana’s Cocoa production is the key driver of the current season’s global supply shortfall, says ICCO, which has revised its estimates for the 2021-22 Cocoa year.
Most notably, the forecasted global deficit, previously set at 174,000 tonnes, has now risen to an estimated 230,000 tonnes. The primary cause of this deficit increase is attributed to Ghana’s steep decline in production, which dropped from a previous forecast of 800,000 tonnes down to 689,000 tonnes.
Ghana, together with neighbours Cote d’Ivoire, accounts for approximately 60% of the global Cocoa supply.
In the ICCO’s third Quarterly Bulletin of Cocoa Statistics for 2021, which includes revised forecasts for the 2021-22 cocoa year and revised estimates of world production, grindings, and stocks of cocoa beans for the 2020-21 cocoa year, it states Incoming arrivals and purchases data reflect expectations of a lower global production for the 2021-22 season.
“Inflation has taken a toll on the prices of farm inputs, resulting in a reduced usage of fertilizers and this, combined with less conducive weather conditions and diseases, has contributed to the downward trend observed in global cocoa production.”
Cocoa demand has held up on multiple fronts despite rising input costs, including high energy costs alongside supply chain issues and an increase in interest rates among others, the ICCO reports.
“Indeed, demand has thus far remained steady during the season and the reduction seen in global supply has to this point been less disruptive to the cocoa market. Yet still, it is worth noting that with the current slowdown in the global economy, cocoa demand is subject to many uncertainties.”