On the Intercontinental Exchange (ICE), Cocoa futures traded near 52-week high of $2,603 per metric ton on the Bloomberg terminal.
With 2020 huge crop season, improving conditions in West Africa’s cocoa-growing regions could lead to record cocoa crops in 2021/22, which could further pressurize cocoa prices.
Ivory Coast, the world’s largest producer of cocoa, experienced the greatest weather impact between July and September. Precipitation in Ivory Coast has been 19% above the 10-year average this season.
A beneficial rainy season has also been experienced in Ghana, the second-largest producer of cocoa. There were 102% more rains in August than in the previous ten years. In order for the main crop to end in a similarly good state, it will require more rain through October.
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According to the International Cocoa Organization, global cocoa production will reach 5.14 million tonnes in season 2020/21 (October/September), up 2.4% from a previous projection this spring of 5.02 million tonnes and 8.7% higher than last year’s crop of 4.73 million tonnes.
ICCO’s most recent production forecast is 117,000 tonnes above its previous projection, mainly because Ghana’s crop was revised from 90,000 tonnes to 1.04 million tonnes. In top grower Ivory Coast, cocoa production reached 2.225 million tonnes, a record high.
Many experts had urged President Muhammadu Buhari to ratify the International Coffee Agreement to encourage the export of high-quality cocoa and create more products that add value to cocoa.
A similar agreement would create more opportunities and create a ready market for Nigerian cocoa exports, they added.
After Nigeria’s membership in the International Coffee Organization was approved by the Federal Executive Council on August 19, 2021, the President confirmed and ratified the ICA 2007.