KANSAS CITY — After three consecutive years of global deficit in cocoa bean production, and with earlier projections from analysts implying a fourth deficit was likely, news from the International Cocoa Organization (ICCO), delivered late on Feb. 28 in its first forecast for the current season, surprised cocoa markets by projecting a global cocoa supply surplus of 142,000 tonnes for the 2024-25 marketing year, which began Oct. 1.
The news sent cocoa markets tumbling Monday, with the May New York cocoa futures contract falling 10% to $8,212 per tonne. London cocoa futures also were sharply lower, closing at $6,567 lbs per tonne, down nearly 11% from the prior session’s close.
The ICCO attributed the surplus to better production amid pressured global demand. Recent high cocoa prices have both incentivized better crop care from cocoa farmers in the Ivory Coast and Ghana, the world's top two cocoa bean producers, as well as redirected food manufacturers’ strategic approaches to their chocolate-based confectionery products.
The ICCO projected global 2024-25 cocoa production at 4.84 million tonnes, up 7.8% from 4.49 million tonnes in 2023-24. Cocoa production in top-producer Ivory Coast was pegged at 1.85 million tonnes this season, up from 1.67 million tonnes in 2023-24. The ICCO forecast 2024-25 production in Ghana at 600,000 tonnes, up from 530,000 tonnes a year earlier. World cocoa grindings, however, were forecast at 4.65 million tonnes, down 4.8% from 4.885 million tonnes in 2023-24.
But back-to-back years of high input costs for cocoa users have weighed heavily on demand. Earlier this year, major world markets showed a 3.2% year-over-year decline in combined fourth-quarter cocoa bean grind, which was the lowest of any quarter since 2017, aside from the second quarter in 2020, which was heavily impacted by the COVID-19 pandemic. Data from cocoa bean grind provides an indication of demand.
