Moussa Konate is an optimist who tempers hope with caution after a season in which his cocoa crop was ravaged by disease.
The outlook is brightening on his tiny Ivory Coast farm, where the October harvest is approaching fast. His trees are bearing abundant pods, and the leaves are a healthy green.
That happy state reflects improvements across the West African cocoa belt that could help relieve a massive supply shortage, which propelled prices to record highs this year. Alongside better weather, the 47-year-old has finally received pesticides to help reduce the harm done by swollen shoot disease and expect yields to be significantly higher than the single ton that he gathered last season.
Yet issues that have long hobbled the industry remain far from fixed, meaning the price of beans that make chocolate isn’t likely to decline back to the much lower levels that had previously prevailed.
Swollen shoot is incurable, leaving farmers no option but to cut down sick trees, and training is scarce among Ivory’s Coast’s one million cocoa planters, the vast majority of whom are small-holders with limited resources. Konate’s 3.5-hectare (8.6 acre) plantation, one of three plots that he cultivates with three wives and nine children, is littered with felled trunks.
“Many farmers do not know that to prevent the spread of the virus, one should not use the same machete that was used to cut down affected trees,” he said, speaking on his farm in the village of Brazzaville, north of the port city of San Pedro.
Such challenges are likely to keep prices well above historic norms, even as a shift to La Nina promises better weather, and some analysts expect global output to top demand for the first in four seasons. Analysts at Fitch Solutions’ BMI unit forecast rolling second-month cocoa futures in New York to average $7,000 a ton in 2024. Although that’s down from eye watering levels above $11,000 earlier this year, most active futures had averaged less than $2,000 for decades, and the December contract is currently trading above $7,000.
“We are certainly not seeing the potential for a big surplus. There is still a lot that can happen in the next months,” said Steve Wateridge at Tropical Research Services. The market will most likely be balanced and “that’s not a good place to be in,” he said.
– Bloomberg
