Industry watchers are warning cocoa shortages are likely in the wake of the tremendous global demand for chocolate and the simultaneous drop in global output.
Cocoa prices have been rising steeply. Last week, it was noted that daily prices had doubled since mid-December, and with the predictions of the International Cocoa Organisation (ICCO) that production will fall 8% during the 2000-2001 season, there are fears that the trend of the last two months is set to continue. The world’s largest producer and exporter, the Ivory Coast, has noted a particular drop in production after bad weather and pests hit harvests hard.
Furthermore, the ICCO is expecting consumption to rise by more than 2% during the course of next year, as new markets in former communist countries open up to chocolate imports. If this projected demand is to be met, an extra 205,000 tonnes of cocoa needs to be produced somehow.
Industry members, exports and importers from around 39 countries are holding a conference in Geneva under the auspices of the United Nations Conference on Trade and Development (UNCTAD) agency. It is hoped that the week-long discussions will find some solutions to the problems facing cocoa producers. The industry is also planning to negotiate a pact such as that of 1993, which is set to expire in September, in order to stabilise the forces of supply and demand.
Industry watchers are cynical about the success of such talks, revealing that the industry has yet to resolve the conflict in price expectation between the producers and the importers. Indeed, the new meeting is in many ways a resumption of last November’s talks, when delegates could not agree on the definition or mechanisms of a “sustainable cocoa economy.”