The International Cocoa Organization (ICCO) on Thursday trimmed its forecast for the global cocoa surplus in the 2016/17 season, reflecting stronger-than-expected growth in grindings. The inter-governmental body put the surplus at 371,000 tonnes, down from a previous projection of 382,000 tonnes, but still slightly above the median forecast in a Reuters poll issued in late July of 350,000 tonnes.
The revision reflected a higher forecast for global grindings in 2016/17 (October/September) of 4.28 million tonnes, up from a previous projection of 4.26 million, and an increase of 3.7 percent from the prior season's 4.13 million. "After growing marginally by under one per cent in the previous season, world grindings of cocoa beans, an indicator of demand, are projected to fare better this current season," the ICCO said in a quarterly update.
The ICCO attributed the rise in grindings to strong growth in Asia and Oceania and an increase in Africa. "Major chocolate manufacturers have generally reported improved sales volumes and the low international cocoa bean prices is anticipated to encourage cocoa processing activities, the ICCO said. World cocoa production in 2016/17 was revised up a marginal 8,000 tonnes to 4.70 million, an increase of 18.1 percent from the prior season.
The ICCO said it had raised its forecast for the crop in top producer Ivory Coast by 30,000 tonnes to 2.01 million tonnes, up from 1.58 million in the prior season. "The heavier-than-usual rainy season in the world's top cocoa producer is reported to have affected the harvesting, transportation and quality of the mid-crop," the ICCO said. "Moreover, with much moisture left in the soil for the upcoming main crop, reports indicate that more sunshine is needed for the development of the (2017/18) main crop."
The most significant downward revision was for Indonesia where a crop of 290,000 tonnes was seen, down 20,000 tonnes from the ICCO's previous forecast. "Mixed weather patterns still persist and the country continues to import significantly more cocoa beans to meet demand," the ICCO said.
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