Rains in West Africa lift cocoa prospects for the region

Ghana and Cote d’Ivoire, the world’s top cocoa producers, are currently in the dry season, when rainfall is rare. But farmers have welcomed the recent precipitation, which should see the October-to-March main crop finish strongly with beans of good quality.

"It's rare to have this level of water during the dry season. This will help the mid-crop develop well​," Jean Boua told local media. He farms near the eastern region of Abengourou, where 19.5 millimetres (mm) fell last week, 16 mm above the five-year average.

"There are still a lot of big pods on the trees and the mid-crop looks good,​" Claude Attesse told Reuters, who farms near Bongouanou, where 7.6 mm of rain fell last week, 5.8 mm above the five-year average.

In neighbouring Ghana, the unseasonal weather will also help precipitate its mid-crop to a strong start, and on the commodities market, prices of cocoa have started to slide, according to the latest data from ING commodities strategists. In its recent update, analysts said cocoa futures fell to their lowest level since mid-November earlier this week due to prospects for better weather conditions in Africa.

Analysts stated cocoa trees suffered from the harmattan season (which lasts from the end of November until mid-March. Forecasts for rainfall in Ghana over the upcoming days might also be helpful, ING said in its update.

Cocoa demand

In its final bulletin for 2023, the International Cocoa Organization (ICCO) said the 2022-23 season was mainly characterised by a decline in supply from the two main producing countries and ended with a global production deficit.

“As the current 2023-24 season is also expected to end with a global production deficit, market participants continue to weigh the situation of successive supply deficits.​

“In this regard, several revisions have been made to the 2022-23 cocoa balance sheet. On the supply side, the production estimate has been revised upwards by 15,000 tons to 4.953 million tons, compared to the 4.938 million tons estimated in the previous bulletin.​

"As cocoa bean grindings are an indicator of cocoa demand, the continuous decline in quarterly grindings data published by the major regional cocoa associations during the 2022-23 season, compared to the previous year, indicates a slowdown in cocoa demand."​

On the demand side, the ICCO said grindings were revised down to 5.002 million tons from 5.005 million tons in its previous Bulletin.