Harmattan Winds Cause Cocoa Production Concerns in West Africa

The intensity of Harmattan winds in West Africa in 2024 is exacerbating concerns about cocoa production, particularly in the Ivory Coast, the world's largest producer. The dry conditions caused by the winds are raising fears of crop damage, compounding existing challenges such as unfavorable growing conditions and crop diseases that have plagued West African farms over the past year. These factors have constrained cocoa production in Ivory Coast, Ghana, and Nigeria, who collectively produce more than two-thirds of the cocoa in the world. This unfavorable weather pattern is heightening worries about potential reductions in cocoa yields, which could further limit global cocoa production.

Recent government data revealed a sharp decrease in cocoa shipments from Ivory Coast farmers to ports in 2023/24, down 36% compared to 2022/23. Additionally, the Ivory Coast cocoa regulator, Le Conseil Café-Cacao, has suspended forward cocoa sales for the 2024/25 season until there is a clearer picture of expected cocoa production in the country. This suspension adds to the uncertainty surrounding cocoa supplies from the region, intensifying concerns about global cocoa availability.

Similar concerns are emerging in Ghana, the world's second-largest cocoa producer. Ghana's cocoa regulator announced that some cocoa farmers are unlikely to fulfill their cocoa contracts for a second consecutive season, leading to the postponement of 44,000 metric tons (mt) of cocoa shipments to future seasons. This decision comes as Ghana grapples with a cocoa crop expected to drop to a 13-year low of around 683,000 mt for the 2022/23 season, significantly below initial estimates. Factors such as a lack of fertilizers and the prevalence of black pod disease have contributed to decreased cocoa yields in Ghana.

Figure 1: Ghanaian Cocoa Bean Production (2019/20 - 2023/24)

Furthermore, Nigeria, the world's fifth-largest cocoa producer, experienced a significant decline in cocoa exports in Dec-23, falling 32% year-on-year (YoY) to 24,921 mt. This reduction in cocoa exports from Nigeria further highlights supply concerns in the global cocoa market.

To address the global supply shortage of cocoa beans, buyers should explore alternative sourcing options. South American countries, particularly Ecuador, emerge as viable alternatives due to their stable production unaffected by adverse weather conditions. Ecuador has become a significant cocoa supplier, ranking third after Ivory Coast and Ghana. According to estimates from the International Cocoa Organization (ICCO) and Ecuador's exporting group Anecacao, Ecuador's annual cocoa production has surged to between 400,000 and 430,000 tons in the 2022/23 season (Oct-Sept), compared to 287,000 tons five years ago. This substantial increase in production underscores Ecuador's growing importance in the global cocoa market.

Given the challenges faced by West African producers, buyers should consider redirecting their sourcing efforts towards South American suppliers like Ecuador. By diversifying their supply chains and tapping into regions with stable production, buyers can mitigate the impact of supply disruptions and ensure a consistent flow of cocoa beans for their operations. Furthermore, Tridge's Outlook Reports provide valuable intelligence on the cocoa market, offering insights into emerging trends and strategic considerations. Armed with this knowledge, buyers can adapt their strategies proactively, staying ahead of market developments and maximizing growth opportunities.