Cargill expects a global cocoa deficit of 160 000 tonnes in 2015/16 after weaker than anticipated interim harvest from the leading West African producers, côte d'ivoire and Ghana.

Total supply of cocoa, however, remains at a good level thanks to the global surplus of 170,000 tons in 2014/15 (Oct/Sep) on the background of significant capacity surplus in the 2016/17 year.

In January and February was a period of six weeks, when rain was little, and it affected the intermediate harvest in côte d'ivoire and in Ghana.

Intermediate bad harvest is the reason to predict now a fairly significant deficit for the whole year.

Drought also reduced the amount of cocoa beans, which complicates processing and reduces the extract. The Council for Coffee and Cocoa côte d'ivoire (CCC) also prohibits the export of small beans.

Since these beans are small, they will remain in the country, because they are difficult to export and difficult to recycle. A large number of these beans may be mixed with the main crop next year.

According to experts, the deficit of the season-2015/16 in the forecast Cargill less than some other market participants, since the company expected that the world economy will fall to 0.5-1.0 percent.

Some other members predict that recycling will increase.

But this is unrealistic, given the sluggish demand for cocoa products in emerging markets, which were, presumably, the incentives for growth for the industry of cocoa, and economic systems of these countries are not successful.

Cargill predicts that production will revive in the 2016/17 year, expecting a significant global surplus.

This is based on the very good development of pods at the moment and the condition of normal weather, which is projected by most meteorological centers.

The demand will be really hard to recover significantly in 2016/17 year, given the still somewhat subdued economic environment.

Source: Thomson Reuters