The International Cocoa Organization lifted by 115,000 tonnes to 1.93m tonnes its forecast for world cocoa inventories at the end of the current season, in October, taking the figure above the recent high set five years ago.
The upgrade, which took year-end stocks levels above 50% of annual demand, reflected even better hopes for the crop in Africa where "excellent" weather has lifted output prospects by more than 200,000 tonnes to 3.1m tonnes, a 25% rise year on year, and more than making up for falling output in Indonesia.
The data came hours after regulators in Ghana revealed that beans declared in the second-ranked cocoa-producing nation had crossed 1m tonnes for the first time, hitting a 2012-13 target two years early, although the increase is believed to have been boosted by crop smuggled in from Ivory Coast.
‘Less favourable weather’
However, the ICCO flagged the potential for lower output next year from Africa, which is estimated responsible for nearly three-quarters of world cocoa production this season.
2010-11 cocoa forecasts, change on last estimate, and (year on year)
World production: 4.195m tonnes, +170,000 tonnes, (+15.5%)
World consumption: 3.828m tonnes, +30,000 tonnes, (+3.5%)
Year-end stocks: 1.931m tonnes, +115,000 tonnes, (+20%)
Stocks-to-use ratio: 50.4%, +2.6 points, (+7.0 points)
"With some traders already starting pod counting for the next season, less favourable weather conditions in Africa indicate that the region’s output is expected to be weaker," the ICCO said, highlighting the crop’s high sensitivity to weather.
"It would be most unlikely to have two consecutive seasons with such ideal conditions for cocoa growing."
Already the Ivory Coast’s midcrop, responsible for about 20% of output in the top producing country, "is beginning to tail off, with farmers reporting that rainfall levels need to decrease and more sun is required to strengthen the development of pods".
Furthermore, high levels of humidity are "raising concerns about the incidence of Black Pod disease," a fungal ailment "which is spreading across the plantations".
Ivory Coast authorities have lifted to 125, from 105, the number of cocoa beans accepted per kilogramme "to reflect the growing conditions of the mid crop", and enabling smaller beans – which contain less fat and are generally considered of lower quality – to make the cut.
The ICCO also lifted its estimate for grindings, by 30,000 tonnes to a record 3.83m tonnes, citing better hopes for Germany, where the amount processed soared by "another massive" 21% in the April-to-June quarter.
Nonetheless, world stocks now look set to end 2010-11 equivalent to more than six months’ consumption.
London cocoa for December stood 1.7% higher at £1,943 a tonne in late deals, with New York’s December lot up 1.3% at $3,066 a tonne.