In its Cocoa Market Report for March 2023, the ICCO said over October 2022 to March 2023, the front-month cocoa futures prices averaged US$2,440 per tonne, up by 6% compared to US$2,304 per tonne recorded a year earlier in London. At the same time in New York, prices of the nearby cocoa futures remained flat at US$2,560 per tonne during the first semester of 2022-23, merely up by 0.4% from US$2,550 per tonne recorded during the first semester of the 2021-22 cocoa season.
During March 2023, the global cocoa market prices were generally bullish. Over the period up to this month, prices of the first position of cocoa futures contracts were boosted on both sides of the Atlantic as concerns of a looming potential financial crisis began wearing off and lower year-on-year arrivals were recorded at Ivorian ports of exports.
In London, futures prices hiked by 4% from US$2,559 to US$2,670 per tonne, while in New York prices of the first position of cocoa futures rallied by 7% moving from US$2,737 to US$2,927 per tonne.
Nidhi Jain, associate specialist at The Smart Cube, told ConfectioneryNews: “Looking at cocoa prices, these are projected to witness a fall owing to hot and dry weather in cocoa-producing countries, such as Ivory Coast. Cocoa bean arrival from farms to Ivory Coast ports fell 4.6% YOY from 1st October to 16th April. Additionally, crop quality in West Africa may be jeopardised due to a lack of fertiliser and pesticides availability as continued sanctions on Russia – the largest fertilisers exporter – has limited exports.
“Energy prices are also expected to rise which could sustain the price hikes, particularly regarding sugar. A bullish price forecast for Brent crude oil prices amid supply uncertainty following OPEC+ members' surprise production cut of 1.16 million b/d (from May until the end of 2023) may help the upward trend in sugar prices, in addition to the limited supply of sugar. A rise in Brent crude oil prices encourages cane diversion towards ethanol production and restricts sugar supply. Furthermore, higher Brent crude oil prices will also increase transportation costs.
“As sugar and cocoa form key ingredients for most confectionery items, price increases for these ingredients are anticipated to affect input costs of confectionery products, increasing the cost for consumers.”
Farmgate price
For the 2022-23 mid-crop, the Ivorian and Ghanian cocoa regulators have left unchanged the fixed farmgate price to 900 XOF per kg ($1,507 per tonne) and 12,800 GHS per tonne ($1,206 US per tonne), respectively. Over the past five mid-seasons, farmgate prices in US$ nominal terms have been higher in Ghana compared to Cote d’Ivoire. However, the situation was reversed during the mid-crops of the 2021-22 and 2022-23 seasons mainly due to the substantial depreciation of the GHS vis-à-vis the USD, the ICCO reported.
With Ivorian cocoa production expected to reach 2.4 million tonnes, the ICCO said current statistics and market information are not supporting this claim.
At the beginning of the 2022-23 light crop, although adequate meteorological conditions were reported in West Africa’s main cocoa growing regions, cumulative arrivals of cocoa beans in Cote d’Ivoire are lagging behind previous season levels while on the contrary in Ghana, volumes of graded and sealed cocoa beans are higher year-on-year.
As of 31 March 2023, cumulative arrivals of cocoa beans in Cote d’Ivoire were seen at 1.779 million tonnes, down by 4.8% (down by 89,000 tonnes) compared to 1.868 million tonnes recorded during the corresponding period of the previous cocoa year.
In addition, gross exports of cocoa beans from the country during October 2022 to February 2023 were reported at 785,700 tonnes, down year-on-year by 1.5% compared to 797,525 tonnes.
In turn, the quantity of graded and sealed cocoa beans purchased in Ghana since the start of the 2022-23 season was reported at 566,846 tonnes by 9 March 2023, representing a robust 18% increase (up by 85,360 tonnes) from 481,486 tonnes recorded over the corresponding period during the 2021/22 cocoa year.
