ICCO lowers estimate for global cocoa supply deficit

The International Cocoa Organization (ICCO) has reduced its estimate of the 2014/15 global cocoa supply deficit to just 15,000 tons - previously the ICCO had assumed a deficit of 38,000 tons. The reason for the downward revision is weaker demand development than previously expected. The ICCO lowered its estimate of global cocoa grinding by 33,000 to 4.13 million tons, though this no longer comes as any great surprise in view of the weak grinding figures from Europe, North America and Asia of late. 

The estimate of global cocoa production was likewise reduced by 10,000 tons, though this was unable to compensate for the sharper decline in demand. The cocoa crop in Ivory Coast was adjusted slightly upwards and is set to achieve a record level of 1.75 million tons. That said, this is offset by a more than 20% slump in production in Ghana to less than 700,000 tons. Indonesia, the third-largest producer, is also set to produce just short of 7% less than last year. The ICCO revised the figure for the supply surplus in the 2013/14 crop year up 8,000 to 22,000 tons, meaning that the global cocoa market is better supplied than previously anticipated. This is likely to block any further rise in the cocoa price, even if attention is now focused more on the 2015/16 crop year which begins in a good month's time, says Commerzbank.