By Maytaal Angel
LONDON (Reuters) – Cocoa prices are expected to continue rising this year due to persistent supply shortages, reaching more than double last year’s levels by the end of 2024, a Reuters poll of 12 traders and analysts.
The year ended at 7,600 pounds a tonne, up 40% from Tuesday’s close and 125% higher than the end of 2023, according to the poll’s average forecast.
Prices rose to a record peak of almost £10,000 in mid-April due to major crop problems in Ivory Coast and Ghana, which produce about 60% of the world’s cocoa.
The poll predicted there would be a record global deficit of 475,000 tonnes in the current 2023/24 season, which runs from October to September, well above the 375,000 tonnes deficit forecast in the previous poll in February.
Next season the market saw a small surplus of 108,500 tonnes, but after three consecutive seasons of shortages it will take some time for prices to settle to lower levels as global inventories have been depleted, participants said.
Ted George, the founder of advisor Kleos Advisory, said that while production should improve next season and consumption weaken somewhat in response to high prices, he still expected a shortage in 2024/2025 due to climate uncertainty.
Other participants expressed concern about the widespread swollen shoot disease in Ivory Coast and Ghana and relatively stable demand as the chocolate industry will be forced to replenish its worn-out stocks next season.
Citi expects prices to normalize to still historically high levels of $4,000-6,000/ton over the next 12 to 15 months as the market moves into surplus next season.
Production in top producer Ivory Coast next season amounted to 2 million tons, a recovery from the expected 1.75 million tons for the current season.
No. 2 producer Ghana’s 2024/25 harvest recovered from 450,000 tonnes this season to 640,000 tonnes.
Cocoa prices in New York ended the year at $8,600 per tonne, up 27% from Tuesday’s close and 107% from the year before.
