Good rainfall in Ivory Coast’s cocoa-growing areas has farmers upbeat on prospects for the season’s smaller crop that starts in April.

Soil is moist in producing regions including the fertile southwest, and the development of flowers that turn into pods is getting a boost from the wet weather, growers said this week.
Farmers in Ivory Coast, the world’s top cocoa producer, harvest a main crop from October to March and a smaller one, called the mid-crop, from April to September.

Recent rain “gives hope for the mid-crop,” Jacques Oulaye, a cocoa farmer based in Gbapleu, in the country’s western mountain region, said by phone March 6. “Young flowers in the trees have begun to blossom, meaning the new pods will go out soon.”

A large mid-crop would compound a surplus of cocoa piling up in Ivory Coast, after the main crop was bigger than expected and some local companies defaulted on contracts to export cocoa.

The International Cocoa Organization last week forecast the West African country’s harvest will increase 20 percent in the current season, contributing to a global surplus that’s projected to be the biggest in six years.

Eoin Treacy's view

The Ebola epidemic which ravaged West Africa between 2014 and 2016 represented a bullish outcome for cocoa prices since it had a negative impact on yields. However with the easing of the outbreak, farmers returned to their holding and supply increased not least because of the outpouring of sympathy for the region from the international community and the assistance farmers have received from major consumers keen to ensure they have secure supplies. 

Cocoa prices have collapsed since September and broke below the psychological $2000 area a month ago to test the 2008 low. A consistent progression of lower rally highs is still in evidence but the price has posted two small upside key day reversals in the last three weeks suggesting at least a pause in the decline. A dynamic move back above $2000 would be required to pressure shorts and suggest short covering is underway.