Abidjan, 11 August 2011

Better-than-expected cocoa production in West Africa will boost global output to 4.2 million tonnes in the 2010/11 season, creating a surplus of 325,000 tonnes, the International Cocoa Organisation (ICCO) said on Wednesday. That figure was up from an estimate last month of 187,000 tonnes. In a Reuters interview during a visit to Ivory Coast, ICCO executive director Jean-Marc Anga also said bad weather in the past weeks would most likely cause global output to fall back below 4 million tonnes in the 2011/12 season, bringing the world back into a deficit.

"The initial output we had for the world's cocoa output was 4,025,000 tonnes. We are reviewing this upwards rather considerably," he said. "At the moment, we're moving from about 187,000 in our last publication to close to 325,000 tonnes." He added: "The weather has played a bigger role in improving production in West Africa than we anticipated."

He added that this was even taking into account a fall in production in Indonesia, largely due to disease. He said Indonesia was expected to produce around 470,000 tonnes or possibly 480,000, compared with earlier projections of more than half a million.

He maintained the ICCO's price forecast of around $3,000 tonnes for next year. Much of the gains were in West Africa, with Ivory Coast likely to produce a record 1.5 million tonnes and Ghana to "go beyond" 1 million tonnes, he said. That was largely down to good weather, although Anga said another factor was improved husbandry, especially in Ghana after a systematic spraying programme there.

Ivory Coast has defied expectations by producing what looks like a record crop, despite a political crisis that tipped the country back into civil war and shut down cocoa exports for three months.

"Even in Cote D'Ivoire (Ivory Coast) where the political situation has been a hindrance to an increase in production, we have raised its level." But if better production was largely down to good weather before the start of this season, poor weather in West Africa now, at a crucial stage for the development of pods ahead of the next main crop starting in October, would bring levels back down, he said.

"Looking for the evolution of weather for the current year, we do not believe we that it is going to be conducive to a huge crop for next year ... rainfall has not been adequate," he said. "The structural deficit is still fundamental, even if from time to time you're going to have a surplus due to weather."

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Reuters - for Commodities Now