W11 Cocoa Update: Global Cocoa Production Expected to Drop by 10.9% in 2023/24 Season, and Easter Sales to Boost Confectionery Brands Despite Rising Cocoa and Sugar Prices

Published 2024년 3월 24일

In W11 in the cocoa bean landscape, cocoa production in Ivory Coast and Ghana has been reduced due to financial challenges, leading to a global increase in chocolate prices. The ICCO predicts a 10.9% YoY drop in global cocoa production this 2023/24 season. Easter sales are expected to boost confectionery brands, but consumers expect higher prices due to increased cocoa and sugar costs. Lastly, Peru's Ministry of Environment is leading the FOLUR Project to promote sustainable coffee and cocoa production.

Reduced Cocoa Production in Ivory Coast and Ghana Impacted Global Chocolate Prices

Cocoa processing in Ivory Coast and Ghana has been halted or reduced due to financial challenges, leading to a global increase in chocolate prices. These two countries, major cocoa producers accounting for nearly 60% of the world's cocoa, have raised consumer prices following three years of poor harvests. Cocoa prices have more than doubled in the past year, reaching record highs. This price surge has disrupted the traditional global cocoa trade, where farmers sell beans to local dealers, who then sell to processors or global traders. This system breaks down during shortages, with local dealers often paying farmers more to secure beans. The International Cocoa Organization (ICCO) predicts a 10.9% year-over-year (YoY) drop in global cocoa production to 4.45 million metric tons (mmt) this 2023/24 season due to a 374 thousand metric ton (mt) shortfall. As a result, processors and chocolate companies will need to use their cocoa reserves to meet demand.

Easter Sales Boost Expected for Confectionery Brands Despite Rising Cocoa and Sugar Prices

Easter is expected to drive up sales for confectionery brands, but global consumers should anticipate higher prices due to increased cocoa and sugar costs. Cocoa prices have surged 35% since Dec-23 and 132% since Feb-23, while sugar prices rose by nearly 16% YoY in Jan-24. These price hikes are due to supply challenges in major cocoa-producing countries like Ivory Coast and Ghana and a sugar supply shortage resulting from adverse weather conditions in India and Thailand. Consequently, chocolate prices will likely increase before Easter as manufacturers transfer these higher costs to consumers.

Peruvian Ministry of Environment Launches FOLUR Project to Promote Sustainable Coffee and Cocoa Production

The Peruvian Ministry of Environment is leading the 'Deforestation-free value chains in the Peruvian Amazon' (FOLUR Project), which aims to promote sustainable coffee and cocoa production and reduce deforestation in the northwestern Amazon of Peru. Supported by the Global Environment Facility (GEF) Project and USD 13.5 million, the project will benefit around 120 thousand deforestation-free coffee and cocoa producers across 17 provinces. This initiative aligns with Peru's commitments to international environmental conventions and aims to address global environmental challenges.

NDC Criticizes NPP Government Over Sharp Decline in Ghana's Cocoa Production

A prominent member of the National Democratic Congress (NDC) has criticized Ghana's President's administration for the sharp decline in cocoa production. They pointed out that when the New Patriotic Party (NPP) government took office in 2017, annual cocoa production was 969 thousand mt. However, they stated that production dropped to around 500 thousand mt in the 2022/23 season, with projections indicating a further decline to 492 thousand mt for the current 2023/24 crop year.