The high price of cocoa continues to cause concern on the international market, due to the adverse effects that have affected the planting of the product in several African countries, including climate change and the outbreak of an incurable disease.
According to a Bloomberg report, farmers in the Ivory Coast are optimistic about next season’s harvest, as they already have the pesticides they need to mitigate some of the impacts of the black pod disease, which has forced the destruction of several cocoa trees.
According to the publication, West Africa produces around 75 per cent of the world’s cocoa, adding that a recovery in harvests would relieve the pressure of world demand, which is far greater than supply, which has left prices increasingly high.
‘Cocoa futures contracts for delivery in December have been trading close to 7,000 dollars per tonne, after surpassing the 11,000 dollar mark at the start of the year. However, the current value is still a long way from the average recorded in recent decades, when each tonne of cocoa was worth just two thousand dollars,’ he clarified.
Although there have been improvements in cocoa plantations in several African countries, analysts at Fitch Solutions believe that the price of the raw agricultural material used to produce chocolate could continue to trade in the range of 7,000 to 11,000 dollars per tonne in the near future.
‘Part of the problem stems from the price-fixing policies adopted by Côte d’Ivoire and Ghana (the world’s two largest cocoa producers), a long-standing practice that aims to protect producers from lower-than-expected market prices, but which ends up weakening incentives to increase supply,’ explain the analysts.
“Cocoa futures contracts for delivery in December have been trading close to 7,000 dollars per tonne, after surpassing the 11,000 dollar mark at the start of the year.However, the current value is still a long way from the average recorded in recent decades, when each tonne of cocoa was worth just two thousand dollars”
According to them, despite having already received fertilisers and pesticides to mitigate some of the effects of the black pod virus, the lack of resources, coupled with a shortage of labour, is still not enough to combat the repercussions this disease has on crops.
Bloomberg revealed that in Côte d’Ivoire, more than 200,000 hectares of cocoa plantations have already been destroyed by the black pod disease – a considerable slice of the approximately 3.5 million hectares that the country cultivates, pointing out that the recovery of cocoa production is dependent solely on the weather.
‘Many farmers are betting on a favourable harvest next season,’ he concluded.
