Global cocoa stocks drop to 50-year low, 2024/25 output seen recovering - ICCO
Cocoa stocks at 1.3 mln T in July, down from 1.79 mln in Sept.
Lower output in top producers curbs world cocoa inventory
Improved weather to aid recovery in cocoa output next year
Recasts paragraphs 1-2 with milestone, adds quote paragraph 4
By Naveen Thukral
SINGAPORE, Sept 12 (Reuters) -The global cocoa stocks-to-grinding ratio has dropped to its lowest in almost 50 years amid a steep decline in output which has boosted prices to all-time highs this year, but production could recover from next month, a senior industry official said on Thursday.
World cocoa stocks tumbled to 1.32 million metric tons in July, from 1.79 million tons in September last year, said Michel Arrion, executive director of the International Cocoa Organization (ICCO).
The ICCO tracks stocks of unprocessed cocoa to measure any shortfalls in supply. The lower the stocks-to-grinding ratio drops the tighter the market.
"Stocks to grind ratio is key here, it was just about 27% in July which is the lowest we have seen in around 50 years," Arrion said.
Global cocoa prices CCc2 roughly tripled this year to an all-time high by April after adverse weather, bean disease, smuggling and reduced plantations in favour of illegal gold mining cut production and availability of beans.
World cocoa production is likely to recover though in the 2024/25 year starting in October, Arrion said, as the weather improves.
"I think cocoa will remain attractive for most of the cocoa producers in West Africa, so we can expect some kind of catching up, maybe not at the level of production two years ago, but still at a reasonable number," he said, adding it was too early to make any precise forecast.
"Of course, climate change will remain, and unfortunately, the disease will remain, but the weather conditions can improve."
Cocoa farmers in Ghana, the world's second largest producer, expect a boost in the 2024/2025 season starting in October after a sharp fall in production this season contributed to the higher global cocoa prices.
Cocoa Prices CCc2 have eased from record highs of around $11,700 per metric ton in April, but are still up 70% this year amid a steep decline in production in Ghana and Ivory Coast which account for over 60% of global supply.
The inter-governmental ICCO, in a quarterly update, has cut its forecast for global production by 129,000 tons to 4.332 million tons, although the impact was partially offset by a reduction in expected global grindings of 104,000 tons to 4.751 million.
Reporting by Naveen Thukral;Editing by Elaine Hardcastle
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