StoneX projected a surplus of 166,000 metric tons for the chocolate-making ingredient, a sharp improvement after the massive deficit of nearly half a million tons in 2023/24.
A surplus would lower prices for chocolate makers and consumers around the world who have been paying a lot more in the last two years due to cocoa shortages caused by unfavorable weather, diseases and illegal mining in West Africa, the world's largest cocoa-producing region.
Cocoa prices in New York rose 61 per cent in 2023 and have gained another 67 per cent so far this year.
"Cocoa growers have benefited from higher prices to boost crop care, and ... there are reports of good development of the crops in West Africa," said StoneX cocoa analyst Rafael Borges.
The broker projected a 12.1 per cent increase in production in Ivory Coast, the world's largest grower, to 1.95 million tons in 2024/25. It estimated a 33 per cent jump in production in Ghana, the second largest grower, to 600,000 tons.
Since high prices have reduced demand, the report said thestocks-to-use ratio, a key indicator of supply, will grow to 31.7 per cent in 2024/25 from 27.2 per cent in 2023/24, which was the lowest level since the 1976/77 season.
Global cocoa market to have first surplus in 4 years, says broker
FE Team | Published: October 06, 2024 22:53:45
Global cocoa market to have first surplus in 4 years, says broker
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