Cocoa production across the globe will hit a record high of 4.85 million tonnes in 2019, with production in West Africa increasing by around a third, new research by Informa's Agribusiness Intelligence has found.
The study also pointed out that an increase in demand for cocoa is unlikely, which will result in price fluctuations throughout the year.
'Very Volatile Market'
A sugar and cocoa analyst at Informa’s Agribusiness Intelligence, Sergey Chetvertakov, explained, "Our weather source indicated that there is a high chance of delayed rains at the end of February and early March, which may hit the mid-crop.
"The status ‘favourable’ can change to ‘adverse’ in a short period of time. Therefore, the weather should be closely monitored for the next three to four weeks, which will clarify expectations for the mid-crop," furthered Chetvertakov.
"Although these are uncertain times for the cocoa market, one thing is for sure: massive cocoa production is almost certain this year, and, as a result, we may expect a very volatile market in 2019, as higher-than-expected production pressures cocoa prices,” he added.
Production Forecast
Cocoa production in Ivory Coast is expected to hit 2.12 million tonnes, while Ghana is predicted to produce 950,000 tonnes.
The output from Nigeria is forecast to reach 250,000 tonnes, and Cameroon is predicted to produce 240,000 tonnes of cocoa.
In other global markets, Ecuador is expected to produce 280,000 tonnes of cocoa in 2018/19, followed by Indonesia, with 260,000 tonnes, and Brazil, with 200,000 tonnes.
Malaysia is expected to produce just 6,000 tonnes in 2018/19.
Demand In North America, the EU
The combined grinding data, an indicator of demand for cocoa, in Europe, Asia and North America saw 3% year-on-year growth in the fourth quarter of 2018, whereas annual demand grew by 4.4%.
It indicates that demand for cocoa is slowing, which may result in lower raw-ingredient prices for manufacturers of cocoa-derived products, which they may choose to pass on to consumers.
The study also pointed out that Europe and North America are experiencing saturation in the local markets.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.
