W10 Cocoa Bean: Global Cocoa Prices Surge in 2024 Amid Supply Shortages, Ghana Cocoa Board's Import Decision Raises Concerns Among Stakeholders, and China's Cocoa Exports Rise as Imports Surge YoY

Published 2024년 3월 15일

In W10 in the cocoa bean landscape, ICCO predicts an 11% YoY decrease in global cocoa bean production for the 2023/24 crop year, with a significant drop in Ghana and Cote d'Ivoire due to natural conditions and tree diseases. This has led to a sharp rise in cocoa bean prices, which increased by almost 50% YoY in 2024. Moreover, the cocoa market experienced fluctuations, with May-24 contracts in New York and London reaching record highs due to persistent supply shortages, poor harvests, and adverse weather conditions. The Ghana Cocoa Board's import decision has raised concerns among industry stakeholders. Lastly, China's cocoa exports increased by 11.7% YoY in Dec-23, reaching USD 48 million, and its cocoa imports surged by 16.26% YoY, reaching 26 thousand tons.

Global Cocoa Bean Production Expected to Drop by 11% YoY in 2023/24 Crop Year

The International Cocoa Organization (ICCO) reports that global cocoa bean production for the 2023/24 crop year is expected to decrease by 11% year-over-year (YoY) to 4.4 million tons. This decline is due to the loss of a portion of the crop in Ghana and Cote d'Ivoire, their largest suppliers, due to natural conditions and tree diseases. The cocoa bean crop in Côte d'Ivoire is estimated at 1.8 million tons, a decrease from 2.2 million a year earlier, and Ghana estimates 580 thousand tons. Concerns about a possible cocoa bean shortage led to a sharp rise in cocoa bean prices, which have increased by almost 50% YoY in 2024. Global cocoa bean prices hit a record high of USD 6.9 thousand per ton in Feb-24 but have since slightly weakened.

Cocoa Contracts for May-24 in New York and London Reached Record Highs Amid Supply Shortages and Weather Challenges

The cocoa market is experiencing notable fluctuations, with the May-24 contract in New York showing a remarkable increase of over 5%, reaching USD 6.58 thousand per metric ton (mt). Cocoa peaked at USD 6.67 thousand/mt during the session, indicating strong activity in the sector. Similarly, cocoa for May-24 in London also saw a substantial gain, reaching 5.5 thousand pounds (lbs) per ton. This surge is mainly due to persistent supply shortages, poor Côte d'Ivoire and Ghana harvests, and adverse weather conditions.

As of March 3, the main cocoa harvest at Côte d'Ivoire ports had a 29% drop compared to the previous season. Exporters highlight the imbalance between supply and demand, affecting prices in the international market. Experts warn that a large global deficit in the 2023/24 season is inevitable, fueling speculation in futures markets. Despite this, the cocoa market remains constantly evolving, offering opportunities and challenges for all involved in the production chain.

Ghana Cocoa Board's Cocoa Import Decision Raises Concerns Among Industry Stakeholders

A leaked letter from the Ghana Cocoa Board (COCOBOD) allowing Afrotropic Cocoa Processing Company Limited to import cocoa beans for processing has caused concern among cocoa sector stakeholders. In Jan-24, the Bank of Ghana (BoG) reported that cocoa is Ghana's third most important export commodity, coming after gold and oil and accounting for 13% of the country's total export receipts. While Ghana is a major cocoa producer and exporter, local processors often struggle to meet production targets due to high costs, and sometimes they import more affordable beans to blend with premium Ghanaian beans. The Ghana Cocoa Board clarified that while Ghana has never imported cocoa as a country, it has allowed Afrotropic Cocoa Processing Company Limited to source 2.5 thousand tons of cocoa beans from Côte d'Ivoire and 1 thousand tons from Nigeria for over twenty years for industrial use by local processors. Critics argue that the focus should be on increasing Ghana's cocoa production.

China's Cocoa Exports Rise by 11.7% YoY in Dec-23

According to China's Customs statistics, China's cocoa and product exports increased by 11.7% YoY in Dec-23, reaching USD 48 million, with a 2.5% YoY increase in volume. China's cumulative cocoa exports decreased by 0.6% YoY from Jan-23 to Dec-23 but increased by 3.7% YoY. From Jan-23 to Dec-23, China's top ten destinations for cocoa and cocoa product exports were Hong Kong, the Philippines, the United States (US), South Korea, Thailand, Malaysia, Indonesia, Russia, Japan, and the Netherlands. These countries collectively accounted for 62.5% of the total export volume, equivalent to 10% of China's overall cocoa exports. Hong Kong was the most important market for cocoa exports, with a 48% YoY increase in value and a 33.9% YoY increase in volume.

China's Cocoa Imports Surged by 16.26% YoY in Dec-23

Cocoa and product imports from China increased 16.26% YoY in Dec-23, with a volume of 26 thousand tons. Moreover, China's cumulative imports were USD 1 billion, a 9.46% YoY increase from Jan-23 to Dec-23. From Jan-23 to Dec-23, the leading countries/regions for cocoa and cocoa product imports into China were Malaysia, Indonesia, Italy, Belgium, Singapore, Russia, Switzerland, the US, Germany, and Ghana. Collectively, these accounted for 79.25% of the total import value. Malaysia was the most important import market for cocoa and products, with an import value of USD 178 million and a 28.53% YoY increase in volume.