Global Cocoa Outlook: Côte d'Ivoire Focus 

BMI View:  Côte d'Ivoire will harvest a record cocoa crop of 1.54mn tonnes in 2013/14. However, the recovery in production will not last, and we see output decreasing in 2014/15. This will keep the global cocoa market in deficit, helping prices averaging higher in 2014 and 2015.

Côte  d'Ivoire is on track to harvest a record cocoa crop in 2013/14, as favourable weather throughout the season helped pod development, especially in the mid-crop (April-September). We have revised up our production forecast for the 2013/14 season ending in September and now see production coming in at 1.54mn tonnes, up by 6.6% year-on-year (y-o-y), compared with our previous forecast of 1.52mn tonnes. However, we believe the production recovery recorded in 2013/14 will not last and remain cautious about growth prospects in the country. In 2014/15, we see production declining by 3.5% y-o-y to 1.49mn tonnes.

Over our forecast period to 2017/18, production will only grow by 7.0% on the 2012/13 level to 1.55mn tonnes, near the 2013/14 level. Our expectations for weak production growth mainly stem from low fertiliser use, less favourable weather conditions and poor revenues for farmers. Insufficient government support and pending labour shortages (owing to government efforts to diversify the economy) will also contribute to subdued production growth. Côte d'Ivoire has made some reforms to its cocoa sector, including a change in the price paid to farmers (farmers receive 60% of the total cocoa price since 2012, compared with less than 50% between 2003 and 2011, according to Jeune Afrique). Despite these measures aimed at providing farmers with more financial security, we believe the lingering problems will prevent significant production growth over the long term. Likewise, the CocoaAction plan - a joint agreement signed in May 2014 between the government and 12 of the world's largest chocolate and cocoa companies, including Barry Callebaut, Cargill, Hershey, Nestlé and Olam International, and which aims to boost productivity in the sector - will have limited impact in the coming years.

On An Uptrend
Select Countries - Cocoa Beans Yields (kg/ha)

Global Cocoa Outlook: Côte d'Ivoire Focus 

BMI View:  Côte d'Ivoire will harvest a record cocoa crop of 1.54mn tonnes in 2013/14. However, the recovery in production will not last, and we see output decreasing in 2014/15. This will keep the global cocoa market in deficit, helping prices averaging higher in 2014 and 2015.

Côte  d'Ivoire is on track to harvest a record cocoa crop in 2013/14, as favourable weather throughout the season helped pod development, especially in the mid-crop (April-September). We have revised up our production forecast for the 2013/14 season ending in September and now see production coming in at 1.54mn tonnes, up by 6.6% year-on-year (y-o-y), compared with our previous forecast of 1.52mn tonnes. However, we believe the production recovery recorded in 2013/14 will not last and remain cautious about growth prospects in the country. In 2014/15, we see production declining by 3.5% y-o-y to 1.49mn tonnes.

On An Uptrend
Select Countries - Cocoa Beans Yields (kg/ha)

Over our forecast period to 2017/18, production will only grow by 7.0% on the 2012/13 level to 1.55mn tonnes, near the 2013/14 level. Our expectations for weak production growth mainly stem from low fertiliser use, less favourable weather conditions and poor revenues for farmers. Insufficient government support and pending labour shortages (owing to government efforts to diversify the economy) will also contribute to subdued production growth. Côte d'Ivoire has made some reforms to its cocoa sector, including a change in the price paid to farmers (farmers receive 60% of the total cocoa price since 2012, compared with less than 50% between 2003 and 2011, according to Jeune Afrique). Despite these measures aimed at providing farmers with more financial security, we believe the lingering problems will prevent significant production growth over the long term. Likewise, the CocoaAction plan - a joint agreement signed in May 2014 between the government and 12 of the world's largest chocolate and cocoa companies, including Barry Callebaut, Cargill, Hershey, Nestlé and Olam International, and which aims to boost productivity in the sector - will have limited impact in the coming years.

Stable For Now
Front-Month LIFFE Cocoa, GBP/tonne (weekly) & RSI (below)

In spite of Côte d'Ivoire's bumper harvest in 2013/14, the global cocoa market will remain in deficit in 2014, as production in other key growing countries will be lacklustre, particularly Indonesia and Ghana. The decline in Ivorian production in 2014/15 will widen the global deficit to 209,000 tonnes in 2015, compared with 138,000 tonnes in 2014. As a result, we forecast prices to average GBP1,850/tonne in 2014 and GBP2,000/tonne in 2015.

Côte d'Ivoire Cocoa Estimates
  FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
BMI Ivorian Cocoa Production* 1,370 1,170 1,182 1,511 1,486 1,445 1,540 1,486
ICCO Ivorian Production * 1,382 1,223 1,242 1,511 1,486 1,475 1,550 na
Cocoa Area Harvested ('000ha) 2,300 2,176 2,150 2,495 2,500 na na na
                                 
% Of Global Production 36.7 32.6 32.6 35.1 36.4 36.8 38.0 36.3
                                 
Cocoa Yield (hg/ha) 6,011 5,621 6,053 6,250 6,600 na na na
LIFFE Stocks (10kg bags) 10,034 5,290 8,335 4,515 4,101 7,596 na na
ICE Stocks ('000 145/lb bags) 1,950 3,027 2,801 3,767 4,484 3,327 na na
BMI Global Cocoa Production* 3,730 3,593 3,630 4,310 4,080 3,930 4,052 4,094
*(000 tonnes). Source: ICCO, FAOSTAT, BMI (FY13 = 10/2012 to 09/2013)
Côte d'Ivoire Cocoa Calendar
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Main Main Main   Mid Mid Mid Mid   Main Main Main
Note: Main=Main Crop and Mid=Mid Crop. Source: FAO, BMI
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