Cocoa production is set to climb by almost 15 percent in 2016/17 (October/September) leading to a global surplus of 264,000 tonnes, the International Cocoa Organization said last Tuesday in its first forecast for the season.
"For the current season, favourable weather conditions helped crops across the main cocoa-growing countries within the West African region," the ICCO said.
The forecast was slightly higher than the consensus of a surplus of 250,000 tonnes for the 2016/17 in a Reuters poll issued earlier this month.
The prospect of a large global surplus in the current season has led to a sharp decline in cocoa prices with New York futures falling to the lowest level since October 2008 earlier this month.
The ICCO also upwardly revised its forecast for the size of the global deficit in 2015/16 to 196,000 tonnes from a previous forecast of 150,000 tonnes, noting a combination of strong harmattan winds and an El Nino weather event had devastated cocoa production last season.
The wider deficit in 2015/16 was driven mainly by lower output forecasts for Cameroon and Indonesia.