Cocoa prices rose back above $10,000 per metric ton on Thursday, heading toward all-time highs, as the chocolate industry’s supply crisis deepened after major producer the Ivory Coast has interrupted its cocoa exports for the month of June and its forward sales for next season.
This follows reports on Wednesday that Ghana, the world’s second-largest producer of the chocolate ingredient, plans to delay the delivery of 350,000 tonnes of beans for next season due to poor harvests.
The price of cocoa has more than doubled this year and is now higher than many metals. September cocoa futures in New York on the ICE market hit a six-week high of $10,308 per tonne, and settled at $10,110 per tonne, up 2.6%.
“Ivory Coast and Ghana have a harvest 30% lower than last year. Nobody knows how to compensate for the missing cocoa, there are not enough beans in the short term to supply the market” , said a trader.
Sources told Reuters that Ivory Coast had suspended the purchase and export of cocoa for the month of June to maintain sufficient stocks for local processors who no longer have enough beans to keep their businesses running. factories.
They added that the ban could be extended beyond June and would affect multinationals such as Cargill, Barry Callebaut, CEMOI and Olam, meaning that European factories expecting Ivorian beans will have to turn to other suppliers. other sources of supply.
The world’s largest cocoa producer has also halted forward sales of next season’s harvest, which amounts to 940,000 tonnes, 35% less than a year ago, pending information clearer on production.
The current season’s deficit has led Ivory Coast to oversell the 2023/24 main harvest from October to March, forcing it to renew contracts for 150,000 tonnes of beans in the current interim harvest.
Ghana is also struggling with forward sales as it seeks to postpone 350,000 tonnes of beans due to uncertain harvest prospects, and sources told Reuters it has only forwarded 100,000 tonnes for 2024/25.
The country regularly sells about 80% of its harvest, which typically amounts to 750,000-850,000 tonnes, a year in advance. Its current harvest is not expected to exceed 500,000 tonnes and traders fear it will not rebound significantly next season.
According to StoneX analyst Vladimir Zientek, it will take a few years for fresh production from non-African countries, such as Brazil and Ecuador, to hit the market.
“The market is very poor in beans and the situation is not going to improve,” he said.
September cocoa in London settled up 3.7% at 8,222 per tonne.
In other commodities, July raw sugar rose 2.6% to 19.59 cents per pound, while August white sugar gained 2.3% to $567.40 per ton.
September robusta coffee gained $7, or 0.2 percent, to $4,093 per tonne, while September arabica coffee rose 0.6 percent, to $2.2625 per pound. (Reporting by Maytaal Angel; additional reporting by Marcelo Teixeira; editing by David Evans and Bill Berkrot)
