The driest conditions in at least 12 years in Côte d’Ivoire and Ghana, the world’s largest cocoa producers, threaten to impair the upcoming harvest. Reduced production in the West African countries would cut into global cocoa stocks just as worldwide demand is finally picking up.
Cocoa is used in manufacturing a wide variety of packaged food items and in baked goods and candies. A decline in global supplies could bolster already high cocoa prices at a time when inflation is cutting into many companies’ profit margins and consumer budgets.
With world cocoa production concentrated in West Africa, local weather has an outsize impact on the global crop size. Dry, hot weather has cut soil moisture to the lowest level since at least 2010, as shown with Gro’s Climate Risk Navigator, and strong seasonal winds blowing from the Sahara, known as harmattan, can knock weak pods off cocoa trees and degrade bean quality, hurting crop yields. Harmattan winds were also particularly harsh during the 2015/16 season, when production dropped by 12% in Côte d’Ivoire, the No. 1 cocoa producer.
The mid-crop harvest in Côte d’Ivoire and Ghana, which accounts for about 20% of the countries' total production, runs from April to September. The bigger, main crop harvest, which goes from October to March, benefited from above-average rainfall during the 2021 summer.
January and February are normally the region’s driest time of the year, but so far in 2022 accumulated rainfall, a key determinant of yields, is 70% below the 10-year average in Côte d’Ivoire, and 78% below average in Ghana. Gro’s Drought Index shows “extreme” drought levels in Côte d’Ivoire’s top growing regions of Daloa and Abengourou, and “severe” drought in Ghana’s Western Region.
Unlike other years when the La Niña climate pattern tends to increase precipitation in West Africa, that hasn’t happened this year. Growing conditions could still improve if rainfall levels return to seasonal norms in the spring.
For much of the COVID pandemic, worldwide cocoa grind rates have been weak because the travel industry, a major point of sale for chocolate, was mostly shut down. Demand is now picking up, however, as many world economies emerge from quarantines.
Estimated world cocoa production of 5.2 million tonnes in the marketing year ended September 2021 resulted in a healthy stocks surplus of about 212,000 tonnes. But this year’s West African drought, coupled with ongoing problems with swollen shoot virus in Ghana, could create a deficit.