Ivory Coast's cocoa production is expected to fall by as much as 20% in the upcoming 2023/24 season compared to recent years due to poor weather, putting further upward pressure on prices, industry sources said.
Ivory Coast is the world's top cocoa producer, and along with neighbouring Ghana produces about two-thirds of the world's supply. The 2023/24 harvest season will start on 1 October.
Production is expected to total about 1.8 million metric tonnes for the season, down from an average of about 2.25 million tonnes annually in recent years, according to a consensus from pod counters and exporters.
The October-to-March main crop is estimated at 1.3 million to 1.4 million tonnes, compared with output of 1.75 million tonnes in the 2022/23 season, the same sources told Reuters.
Cocoa Bean Contract Sales
Ivory Coast's Cocoa and Coffee Council (CCC) regulator has closed its cocoa bean contract sales for the 2023/24 season at 1.4 million tonnes, down 18% from 1.7 million tonnes in the previous season, according to CCC sources.
The government is expected to raise the guaranteed cocoa farmgate price to between 1,100 and 1,250 CFA francs ($2.06) per kilogramme for the 2023/24 crop, up from 900 CFA francs/kg currently, CCC and government sources told Reuters.
The drop in production is mainly attributable to poor weather conditions. This year there is no carry over stock from the season that is ending, which normally adds to the beans available in October.
Cocoa futures have hit 46-year highs in recent weeks due to concerns over a supply squeeze in West Africa.
'A Mediocre Main Crop'
"We are expecting a mediocre main crop harvest because there is no stock in the bush at the moment," said a CCC official, adding that he hadn't seen this situation in 15 to 20 years.
Another CCC source said that for the last decade the regulator has sold around 1.7 or 1.8 million tonnes of cocoa per year in advance contracts, but this year it is down to 1.4 million because the forecasts are so bad.
Exporters, planters and pod counters confirmed that the situation on some plantations was alarming.
"It has been clear since August that we will face a complicated and difficult season. We will have to fight for every bean because the situation is unprecedented," the director of a European multinational cocoa company said on condition of anonymity.
Ghana already hiked its price for the upcoming season by more than 63% amid tightening supplies.
On Monday, Ivory Coast cocoa farmers reported adequate weather conditions last week in most of the main cocoa-growing regions, although heavy rain in some parts raised fears of disease.
