Possible El Nino weather conditions later this year could exacerbate a potential global cocoa deficit in the coming 2012/13 season, causing prices to climb, the International Cocoa Organisation (ICCO) said. "We know that when we have El Nino conditions it's likely that this will impact negatively on world cocoa production. We would have less production and this would have an impact on price," ICCO statistician Laurent Pipitone told Reuters.
"If we are in a period when we have already a deficit, and in addition we have this factor that adds to the deficit, the impact on price would be even higher," he added. El Nino - the warming of the Pacific Ocean leading to a shift in weather patterns - caused a drop of 2.4 percent in world cocoa output on average when it occurred over the last 60 years, according to ICCO data.
Such a drop equates to around 100,000 tonnes of cocoa at current production levels, Pipitone said. The ICCO has predicted a deficit of 71,000 tonnes in 2011/12 (October-September), after a record surplus the previous year, when ideal weather boosted West African output. West Africa produces around two thirds of the world's cocoa, led by Ivory Coast.
ICE cocoa futures prices hit a 32-year high in March last year after a disputed presidential election saw a temporary ban on cocoa exports in Ivory Coast, but prices have since fallen by around 40 percent. Pipitone said that crop prospects for the tail of West Africa's 2012/13 October-March main crop along with the 2012/13 April-September mid crop was most at risk from potential El Nino weather conditions later this year. The ICCO bases its expectations on whether there will be El Nino conditions on predictions from the National Oceanic and Atmospheric Administration (NOAA) and The Australian Government Bureau of Meteorology.