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ICCO Estimates 100K Tonnes Supply Deficit For 2022/23 Season

The International Cocoa Organisation (ICCO) estimates a global cocoa supply deficit of around 100,000 tonnes for the just-ended 2022/23 season.

According to the ICCO, contrary to market expectations for a balanced supply situation, “adverse weather conditions in Côte d’Ivoire and Ghana have led to a change in these expectations.”

Early on in May, the world cocoa industry body foretold with certainty the occurrence of a supply deficit, although compared to the 2021/22 season, the 2022/23 global production is projected to increase by 3.4% to 4.980 million tonnes.

“A deficit of around 100,000 tonnes is currently estimated for the 2022/23 season which just ended,” the ICCO indicated in its Cocoa Market Report for September 2023.

As cumulative port arrivals indicated that the market was heading towards a supply deficit, cocoa prices in real terms surpassed the levels recorded during the 2021/22 season.

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The International Cocoa Organisation also said that the news of an expected El Nino weather phenomenon during the period also supported the rally of cocoa prices.

The report described the price situation as “good for some farmers and exporters, but not most of them.”

Cocoa prices in September 2022 averaged US$2,083 per tonne and ranged between US$2,027 per tonne and US$2,160 per tonne in London, while in New York, they averaged US$2,339 per tonne and ranged between US$2,240 per tonne and US$2,438 per tonne.

Overall, cocoa prices remained significantly high for the last month of the 2022/23 season compared to the same period a year ago.

For September 2023, cocoa prices averaged US$3,739 per tonne and ranged between US$3,580 per tonne and US$3,848 per tonne in London. In New York, they averaged US$3,669 per tonne and ranged between US$3,575 per tonne and US$3,874 per tonne

The report also acknowledged the incidence of cross-border flows or smuggling of cocoa beans in some producing countries which it attributed to price disparities.

“At present, however, it is not possible to assess the extent of this geographical arbitrage as the 2023.Q3 official trade statistics will become available in 2024.Q1 only.”The ICCO further claimed that hoarding of cocoa beans was observed in Côte d’Ivoire and Ghana during the latter part of the 2022/23 mid-crop.”This was fueled by expectations of a higher farm gate price for the 2023/24 season. The incidence of bean hoarding is reported to be one of the disruptions that led Ghana to open the 2023/24 season earlier on 8 September 2023 instead of the start of October 2023,” it said.

Meanwhile, cocoa grindings for the year under review are expected to rise by 1.5% to 5.072 million tonnes.

Kojo Hayford
Source Cocoa Post
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