NEW YORK: The global cocoa is expected to record a widening supply deficit in the current season that ends in September, and prices are seen rising as a result, according to a Reuters poll of eight analysts and brokers.
The median forecast for the global cocoa supply balance in 2021/22 is for a deficit of 150,000 tonnes, compared to a shortfall of 125,000 tonnes seen in the previous poll in September.
As a result, New York cocoa futures are seen ending the year at $2,800 per tonne, 5.4% above the closing price on Tuesday.
London cocoa futures are seen closing 2022 at 1,875 pounds per tonne, 8.7% higher than Tuesday's close.
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Poll participants see smaller production in the world's second largest producer Ghana and potentially higher demand as most countries leave the worst of the coronavirus pandemic behind them.
"Strong Harmattan conditions lasting longer than usual and impacting mid-crop figures in West Africa. Notable production drop in Ghana for 2021/22," said one of the analysts referring to main factors impacting the cocoa market going forward.
Harmattan, the climatic occurrence of dry, strong winds blown from the Sahara towards the West of Africa, has been intense recently, negatively impacting the tree canopy.
The poll's median forecast for the crop in Ghana this season fell to 750,000 tonnes from 775,000 tonnes in September and more than 1 million tonnes in 2020/21. Output in top cocoa grower Ivory Coast was seen stable at 2.2 million tonnes.
"Supply and demand deficit is likely to become structural as combined crops from Ivory Coast and Ghana are near the maximum considering current acreage and yields," said a US-based broker.
Poll participants also said shipping difficulties, such as reduced container availability and difficulty booking space on vessels, continues to impact the market, increasing costs and prices.
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