Ivory Coast, the world’s leading cocoa-producing nation, has been hit by a series of heavy rains and floods in recent weeks, prompting the suspension of cocoa contracts for the 2023-2024 season. The decision comes as cocoa prices soar to record levels, sparking concerns over the global supply of this precious commodity. Yves Brahima Kone, Director General of the Coffee and Cocoa Council (CCC), revealed the dire situation to Reuters: “We stopped the sales a few days ago because we are not certain of having enough volume to cover the sales.”
Cocoa is a crucial driver of Ivory Coast’s economy, accounting for a staggering 40% of the country’s export earnings, as reported by the United Nations. The suspension of sales will undoubtedly impact the nation’s financial stability. Prior to the suspension, Ivory Coast had already exceeded one million tonnes in cocoa sales, while the projected output for the current season stood at 2.2 million tonnes. This setback will also affect major players in the industry, including commodities trading houses such as Cargill and Olam, as well as renowned chocolate manufacturers like Barry Callebaut, Hershey, and Nestle.
The main cocoa harvest, scheduled to commence exports in October, is expected to see a significant decline in output. Yves Brahima Kone warned, “We expect much less cocoa in the first part of the main harvest compared to this season. We hope that the production from January to March will help balance our volumes, otherwise, it will be a problem.” The heavy tropical downpours witnessed in Ivory Coast, along with other major cocoa-producing countries like Ghana, Nigeria, and Cameroon, have caused severe damage to cocoa farms, particularly in the southwest and southeast regions.
Farmers and residents in the affected regions reported unprecedented levels of rainfall, causing delicate cocoa flowers and cherelles, which were meant to develop into the first pods of the upcoming main harvest, to fall prematurely from the trees. Additionally, the prolonged wet conditions have led to the spread of brown rot disease, further jeopardising the cocoa yield. Kouman Kouadio, a distressed farmer from the Aboisso region, shared his concerns, stating, “Almost all the flowers fell after the rains, and rot is spoiling everything else. For now, we don’t see any upcoming harvest because there is nothing on the trees.”
The Coffee and Cocoa Council is assembling a team to assess the situation and take necessary measures to mitigate the impact of brown rot disease. However, the challenges ahead remain daunting. With cocoa futures prices reaching a 46-year high and climbing over 27% since January, industry experts fear the supply shortfall may exacerbate an already fragile global cocoa market.
The hope now rests on the forthcoming production period between January and March, which will need to compensate for the anticipated decline in the first part of the main harvest. International stakeholders and chocolate lovers worldwide brace themselves for potential price fluctuations and potential supply shortages in the wake of this cocoa crisis.