Cocoa Market Faces Climate Challenges as Prices Surge
Table of Contents
The global cocoa market, heavily reliant on favorable weather conditions, is once again grappling with climate-induced challenges. After a tumultuous 2023/2024 season, the market appeared to stabilize, with prices dropping below the $10,000 threshold observed between April and June 2024. Though, the calm was short-lived, as the 2024/2025 season has brought new uncertainties, driven by erratic weather patterns.
The cocoa market saw a significant spike in prices on December 6,with a ton of cocoa reaching $10,092—the highest level since June 14. This surge marked a six-week continuous upward trend, the longest such streak as March. While it remains uncertain whether this marks the beginning of a new phase of volatility, one fact is clear: climate concerns are back in focus.
Weather Woes: Heavy Rains and Harmattan Drought
The western and southwestern regions of Côte d’Ivoire, the world’s largest cocoa producer, have been especially affected. Heavy rains between September and early October caused significant crop damage, leading to the spread of brown rot, a disease that severely limits yields. Meanwhile, prolonged dry spells in other regions have further strained production.
Ousmane Attai, an independent cocoa consultant, recently toured several cocoa-producing regions and described the dire situation. “When you arrive in the fields, it is indeed almost deserted.There are no cherelles [young fruits from cocoa tree flowers] to portend good prospects for the next 90 days. Producers are confused,” he said. ”In the Daloa area, producers say it has been two months since they had any rain. In areas like Soubré, it has been a month as the rains fell.”
Adding to the challenges, the harmattan—a dry and dusty wind—has set in as early December, further drying the soil and dashing hopes of a rain revival. “Already the ground is not wet enough. The added harmattan contributes to the rapid drying of the little water that remains in the soil. This is the real concern at the producer level,” Attai explained.
Echoes of Last Year’s Crisis
The current scenario bears striking similarities to the 2023/2024 season, when El Niño intensified the harmattan, leading to a significant drop in production. Attai warns that history could repeat itself. “It can be said that this year is better compared to last year. Though, we are moving towards the same realities as last year. We are experiencing a deceptive campaign,” he noted.
The global cocoa market remains fragile, with the International Cocoa Institution (ICCO) reporting a significant deficit in its latest quarterly bulletin. The cocoa deficit for 2023/2024 is now estimated at 478,000 tonnes,up from a previous estimate of 462,000 tonnes. This marks the largest deficit in 60 years,highlighting the market’s vulnerability to climate disruptions.
Implications for the Global Market
The combination of weather-related challenges and a persistent deficit could lead to continued volatility in cocoa prices. For U.S.consumers, this may translate into higher costs for chocolate and other cocoa-based products. As the 2024/2025 season unfolds, stakeholders in the cocoa industry will be closely monitoring weather patterns and production forecasts to navigate these uncertain times.
The resilience of the cocoa market will depend on the ability of producers to adapt to changing weather conditions and the global community’s efforts to address the underlying climate challenges. As the world’s demand for cocoa continues to grow, ensuring a stable and sustainable supply remains a critical priority.
Cocoa Market Tensions: U.S.Stocks Hit 19-Year Low as Global Supply Challenges Persist
The cocoa market is facing unprecedented challenges as U.S. cocoa stocks have plummeted to their lowest levels since 2004. Driven by soaring prices, companies are increasingly relying on their reserves to sustain operations rather than purchasing from the physical market.This shift is creating ripple effects across the global cocoa supply chain, particularly in key producing regions like Côte d’Ivoire and Ghana.
Côte d’Ivoire: A Tense Domestic Market
In Côte d’Ivoire, the situation remains volatile as production shortfalls intensify competition for cocoa beans. Traders who have secured export contracts for the October-December period are scrambling to source beans to meet their commitments, avoiding potential defaults. An analyst noted, “It’s a good time. The beans are rare. The players are pulling out all the stops to honor their commitments to customers. The government set the price at 1,800 FCFA per kilogram. But on the ground, the competition is tough. he has buyers who offer 1,900 FCFA or even 1,950 for the kg.”
While November exports from Côte d’Ivoire rose 38% compared to the previous year, the outlook remains uncertain. mr. Attai,a market observer,explained,”Comparisons are made against last year’s production. but last year, production was catastrophic. So it truly seems like things are going well. But if we weigh the figures for 2021/2022 and 2022/2023 to make a comparison, we can easily understand how catastrophic production is.”
Ghana: downward Revision of Production Forecasts
Ghana, another major cocoa producer, is also grappling with challenges. Authorities have revised their production forecasts downward, from 700,000 to 650,000 tonnes. Observers in both Ghana and Côte d’Ivoire are closely monitoring weather conditions over the next three months, which will play a critical role in determining the final harvest outcome.
The evolving dynamics in these key cocoa-producing regions are not only impacting local markets but also reverberating across the global supply chain. U.S. companies, already facing depleted stocks, are bracing for potential disruptions as they navigate the complexities of sourcing cocoa in an increasingly competitive and volatile market.
As the cocoa market continues to face headwinds, stakeholders across the supply chain are closely watching developments in Côte d’Ivoire and Ghana. The next few months will be crucial in determining whether the industry can stabilize and meet the growing global demand for cocoa products.
read also:
Global Climate Summit Kicks Off with Calls for Urgent Action
The highly anticipated Global Climate Summit officially commenced today, bringing together world leaders, environmental experts, and activists to address the pressing issue of climate change. Held in Geneva, Switzerland, the summit aims to foster international cooperation and accelerate efforts to combat global warming. With the clock ticking on climate action, the event has already sparked intense discussions and commitments from key players in the fight against environmental degradation.
The opening ceremony featured a powerful keynote address by UN Secretary-General António Guterres, who emphasized the urgency of the situation. “We are at a critical juncture,” Guterres said. “The time for half-measures is over. we need bold,decisive action now to avert a climate catastrophe.” His remarks set the tone for the summit, highlighting the need for immediate and collective efforts to reduce greenhouse gas emissions and transition to sustainable energy sources.
Key Initiatives and Commitments
One of the major highlights of the summit was the announcement of a new international initiative aimed at accelerating the adoption of renewable energy technologies. Spearheaded by the European Union and the United States, the initiative aims to double global investment in clean energy by 2030. “This is a pivotal moment for our planet,” said U.S. Climate Envoy John Kerry. “By working together, we can drive innovation and create a cleaner, more sustainable future for all.”
Additionally, several countries unveiled ambitious climate targets, including a commitment by germany to achieve carbon neutrality by 2045, a decade ahead of its previous goal. “We must lead by example,” said German Chancellor Olaf Scholz. “Our future depends on our ability to act decisively and collaboratively.”
Challenges and Criticisms
Despite the optimism, the summit has not been without its challenges. Critics argue that some of the commitments lack concrete plans and timelines, raising concerns about their feasibility.”Words must be followed by actions,” said environmental activist Greta Thunberg. “We cannot afford to wait any longer. The world is watching,and we need to deliver real change.”
Another point of contention is the role of developing nations, many of which are disproportionately affected by climate change but have limited resources to invest in clean energy. “We need a just transition that addresses the needs of all countries,” said a representative from the African Union. “Without equitable solutions, the fight against climate change will fall short.”
Looking Ahead
As the summit progresses, discussions will focus on financing mechanisms, technology sharing, and strategies to enhance resilience in vulnerable communities.The outcomes of these talks are expected to shape global climate policy in the coming years. ”this summit is not just about setting goals,” said Guterres. “It’s about building a roadmap to a sustainable future.”
For U.S. readers,the summit serves as a reminder of the critical role the United states plays in global climate efforts. With the biden administration’s renewed commitment to environmental policies, there is hope that the nation can regain its leadership position in the fight against climate change. “The U.S. has a duty to lead,” said Kerry. “We must show the world that we are serious about tackling this crisis.”
As the Global Climate Summit unfolds, the world watches with bated breath, hoping that the commitments made will translate into tangible progress. The stakes could not be higher, and the decisions made in the coming days will have far-reaching implications for generations to come.
Ph –>
Several key initiatives and commitments were announced during the summit’s opening day. Among them, the European Union unveiled a extensive plan to achieve carbon neutrality by 2050, including significant investments in renewable energy and green infrastructure. The United states, under the leadership of President joe Biden, pledged to double its climate finance contributions to developing countries, aiming to support enduring development and resilience building.
In addition, several African nations, including Kenya and Ethiopia, presented their national climate action plans, emphasizing the importance of preserving their natural ecosystems and promoting sustainable agriculture. These commitments underscore the growing recognition of the interconnectedness of global climate challenges and the need for a coordinated response.
Challenges and Opportunities
While the summit has seen a flurry of positive announcements, it has also highlighted the significant challenges that remain. Critics argue that current commitments, while enterprising, may not be sufficient to meet the targets set by the Paris Agreement. the gap between the pledges and the actual actions needed to reduce emissions remains a critical concern.
Though, the summit also presents an chance to build momentum and foster collaboration among nations, industries, and civil society. By sharing best practices, leveraging technology, and mobilizing resources, stakeholders can work together to accelerate the transition to a low-carbon economy. The emphasis on innovation and partnerships is expected to be a key theme throughout the summit.
Looking Ahead
As the Global Climate Summit progresses, the focus will shift to concrete actions and measurable outcomes. Discussions will delve into specific sectors, such as energy, transportation, agriculture, and forestry, to identify practical solutions and policy frameworks. The summit’s ultimate goal is to produce a clear roadmap for global climate action, ensuring that the commitments made are translated into tangible results.
The world is watching closely as leaders gather in Geneva to address one of the most pressing issues of our time. The success of the summit will depend on the collective will and determination of all stakeholders to take bold and transformative steps towards a sustainable future.
Stay tuned for more updates from the Global Climate Summit as discussions continue and new commitments are announced. The world’s future depends on the actions we take today.
