Ivory Coast suspends cocoa sales as bad weather and diseases threaten production

IVORY COAST – The Ivorian Cocoa Coffee Council (CCC) has suspended cocoa futures sales in the 2023/2024 campaign until further notice due to ongoing uncertainties linked to the supply chain.

Yves Brahima Kone, director general of the public body told Reuters that uncertainty about the supply of sufficient quantities of raw materials from the production areas to cover sales and the heavy rains recorded between May 15 and July 10 with the resulting episodes of flooding have really affected cocoa.

The humid conditions have also catalyzed the thriving of brown rot (or black pod disease), a fungal disease of cocoa trees that propagates in prolonged humid conditions. The CCC pointed out that the disease is already spreading in many plantations, but it is swiftly assessing the situation more objectively.

“We expect much less cocoa in the first part of the main harvest compared to this season. We hope that the production from January to March will allow us to balance our volumes, otherwise, it will be a problem,” underlined Mr. Kone.

Before the suspension was called forth, he said the cocoa sales to date had exceeded one million tonnes or about 50% of the expected harvest of 2.2 million tonnes.

“Brown rot is progressing everywhere because of the rains. We are building a team to assess the situation more objectively. This worries us and we must take steps to mitigate it,” Kone detailed.

The suspension is termed as a big blow to buyers such as major commodities trading houses such as Cargill, Olam, and chocolate makers like Barry Callebaut, Hershey, and Nestle.

With cocoa prices currently at record levels, the suspension of sales will also come as a hard hit to the country which the United Nations says is reliant on cocoa for 40% of its export earnings.

Farmers, cocoa pod counters, and cocoa exporters based in Ivory Coast expect a significant decline in output during the first part of the main harvest. CCC had projected, for the current season, the total cocoa output to be 2.2 million tonnes.

Ivory Coast is the world’s top cocoa-producing country, accounting for 45% of the world’s cocoa supply, followed by Ghana and Indonesia.

Ivory Coast also has plans to increase the amount of cocoa it processes domestically to 49% of production starting from October with the addition of several new plants, the head of the sector regulator.

Currently, about 35-40% is processed in the country and the rest is exported, but the government has a goal of increasing that to at least 50%.

The country is in contract with the United Arab Emirates for the construction of a new plant in San Pedro with a grinding capacity of 120,000 tonnes and China for the construction of two factories with a production capacity of 50,000 tonnes each.

The new plants will allow the country to process more than 1 million tonnes of cocoa annually, making it the world’s leading cocoa grinder.

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