Global Cocoa Deficit Projected to Deepen, Pushing Stocks to 45-Year Low

ICCO forecasts continued tight supply for 2023/24 cocoa year, keeping prices elevated

The global cocoa market is poised for another year of tight supply, with the International Cocoa Organization (ICCO) forecasting a deepening production deficit and dwindling stockpiles. This prediction, released in the August edition of the Quarterly Bulletin of Cocoa Statistics, comes as adverse weather, aging trees, and disease continue to hinder cocoa production in key growing regions.

The ICCO now projects a global cocoa deficit of 462,000 tonnes for the 2023/24 season, a significant increase from their previous forecast of 439,000 tonnes. This widening gap between supply and demand is driven by an anticipated 14.2% year-on-year decline in global cocoa production, revised down to 4.332 million tonnes.

This production shortfall, coupled with robust demand, has drawn down cocoa stockpiles to critically low levels. The ICCO estimates that by the end of the 2023/24 season, global cocoa stocks will plummet to 1.324 million tonnes, a 26.1% decrease compared to the previous year. This would represent a 45-year low for the crucial stocks-to-grindings ratio, a key indicator of market balance, reaching a concerning 27.9%.

The report highlights the impact of these supply constraints on prices. Although cocoa prices have retreated from their recent historic highs, they remain elevated due to persistent market tightness.

"Global supply remains low," the ICCO stated, emphasizing the challenges faced by cocoa producers. The report specifically cited adverse weather conditions, aged cocoa trees, and the prevalence of pests and diseases as major contributors to the production decline.