18 July 2018 ( Lagos ) : In line with Analyst's prediction at the start of the year, cocoa prices surged in the first half of 2018 (+19.5%) due to concerns over the dry and hot weather prevailing in West Africa which in turn impacted cocoa output, particularly in Cote d’ivoire and Ghana – the world’s top cocoa suppliers.
On the back of this, over the ongoing 2017/2018 season, the ICCO13 forecasts a 157KMT decline in production to 4.6MMT with demand projected to rise 131KMT to 4.5MMT, indicating a modest surplus of 10KMT. Further on the supply side, output from Ghana is expected to decline 272KMT to 700KMT while cocoa supply in Cote d’ivoire is forecasted to drop 20KMT to 2MMT.
On the demand side, the growth in world grinding of cocoa beans is due to low international prices which attracted cocoa processors in a bid to drive up processing margins. Going forward, the persistence of the current hot weather in major cocoa growing regions could have a negative impact on the development of output. Hence, in view of tightening supplies, cocoa prices are expected to edge higher over the rest of 2018.
Source: ARM Securities Limited
Reporting for EasyKobo on Wednesday, 18 July 2018 in Lagos, Nigeria
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