The new surge in cocoa prices initiated a month and a half ago continues. It is fueled by concerns about production in Ghana and Ivory Coast. And this even if the harvest this year promises to be better than that of last year, which fell by a quarter at the two world leaders in the bean.
A very smart person can say whether prices will rise to $12,000 per tonne, their historic peak in April, and if so how quickly this level will be reached. But the rapid increase observed since the beginning of November illustrates real market stress. What is causing this surge in prices is essentially concern about production in the two world leaders: Ivory Coast and Ghana.
One of the reference indicators for evaluating the harvest is the volume of beans arriving at the port of Abidjan and San Pedro, before shipment. This year it is higher than last year – +34%, or 187,000 tonnes more at the end of the first week of December according to statistics reported by the International Cocoa Organization (ICCO) – but 10% lower than two years ago. “There is a return to substantial quantities, but not record» summarizes the boss of the ICCO. The missing 10% is clearly enough to worry operators. Because this year, more than others, part of the harvest will be used to honor an unknown number of contracts which could not be done last year, due to lack of beans.
Closing the deficits
The whole question is therefore whether the 2024/2025 harvest which is underway will be sufficient to make up for the past deficit and meet this year's needs. Current prices reflect this supply concern, to which must be added diminishing stocks. We are talking about global stocks, in the warehouses of producing countries and at destination, that is to say in particular port stocks in Antwerp, Hamburg and Amsterdam, stocks with manufacturers and those floating at sea.
If they are important it is because these stocks serve as a valve to compensate for a drop in supply. Today, they would be equivalent to 3 or 4 months of consumption, according to estimates. If they fall below the three-month mark, and this could be the case during the next calculation communicated in February 2025 by the ICCO, the tension could increase and prices rise a little more.
