This episode provides a concise briefing on the evolving dynamics of the global cocoa market as of January 5, 2025.
With West Africa’s cocoa supply under strain and global prices surging to record highs, this week highlights key trends shaping farmer behavior, trade flows, and production forecasts across Ivory Coast, Ghana, and Peru.
Key Themes Discussed:
Port Arrivals vs. Quality Risk in Ivory Coast
- Cocoa port arrivals in Ivory Coast reached 895,000 metric tons by mid-December, a 32.8% year-on-year increase, though still 15% below 2022 levels.
- The dry Harmattan winds and insufficient rainfall threaten bean quality, particularly in major growing regions like Daloa, Yamoussoukro, and Bongouanou.
Harvest Outlook Divergence
- While areas like Soubré and Agboville are benefiting from better rains, market concerns center on a potentially early end to the main crop, reducing arrivals by February and March.
Grinding Activity and Logistics Bottlenecks
- Cocoa grinding surged 16.1% year-on-year in November, reaching 60,694 metric tons.
- Poor road infrastructure and congestion, especially at San Pedro Port, are raising fears of supply gaps and contractual defaults.
Ghana’s Structural Reforms Amid Financial Pressures
- Under President John Mahama, Cocobod is targeting leaner operations and greater private sector involvement.
- Reliance on multinational exporters like Cargill and Barry Callebaut has intensified, endangering the survival of local buying companies.
Production Risks and Price Surge
- Ghana’s production forecast for 2024–25 has been cut by 5% to 617,500 tons, driven by disease outbreaks and weather adversities.
- Meanwhile, global cocoa futures breached $12,000 per ton, reflecting mounting supply concerns but offering a silver lining for farmer incomes.
Peru’s Expanding Export Footprint
- Peru exported 287,466 kilograms of cocoa husks from January to November 2024, generating $17.11 million in revenue.
- The United States remains Peru’s largest buyer, followed by Chile, Argentina, Colombia, and Mexico, highlighting Peru’s rising stature in specialty cocoa markets.
Strategic Implications:
Supply Chain Vulnerabilities:
- Weather volatility and infrastructure weaknesses are compounding risks across West Africa’s cocoa supply chain.
Price Volatility Outlook:
- Elevated futures prices may persist if crop quality deterioration and logistical challenges deepen into February and March 2025.
Structural Overhauls in Ghana:
- Cocobod’s privatization and cost-cutting efforts, if successful, could reposition Ghana as a more efficient producer in the mid-term.
Export Market Diversification:
- Peru’s steady rise highlights growing opportunities in Latin America, especially as global buyers seek to diversify sourcing beyond West Africa.
Listen to this episode for:
- A sharp, insightful update on key developments affecting cocoa supply and pricing
- Strategic points for traders, chocolate manufacturers, and policymakers
- Early indicators of 2025's potential supply risks and investment opportunities in cocoa
