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- Another bad cocoa season is looming.
- Cameroon is hiking prices by 25%.
- West Africa is a critical supplier of cocoa, and weather conditions there suggest a third straight year of global shortages.
Cameroon has raised the fixed farmgate price it pays to cocoa farmers to 1,500 CFA francs (R47) per kilogram for the 2023/2024 season, in increase of one quarter from the 1,200 CFA francs set for last season, trade minister Luc Magloire Mbarga Atangana said on Thursday.
The price is the highest since 2015, the minister said, adding that it was increased due to a global production shortfall.
Milk chocolate typically has a minimum of 25% cocoa mass, and dark chocolate has a far higher proportion of cocoa.
As a rule of thumb, 100kg of dry beans yield around 40kg of cocoa butter and 40kg of cocoa powder, via a lengthy process that includes fermentation and roasting.
London cocoa futures on the Intercontinental Exchange steadied on Thursday, having hit a 46-year peak above R70 000 per metric ton in the previous session.
Prices remain supported by concerns the market is heading into a third straight deficit in the 2023/24 (October to September) season, with weather signals from key producing region West Africa still worrisome.
About two-thirds of the world's total cocoa crop comes out of West Africa, much of it from the Ivory Coast, with Ghana, Nigeria and Togo the other major producers alongside Cameroon.
The Ivory Coast has struggled with a severe shortfall of beans to cover forward contracts.
Earlier this month, South African producer De Villiers Chocolate said it was closing down due to difficulties that include load shedding and the price of cocoa.
While weather has been unfavourable, demand for chocolate has grown fast in recent years, and cocoa trees take some 10 years to come into production, so supply has not kept up.
By some forecasts, climate change could effectively see cocoa farming grow impossible by 2040.
Additional reporting by News24.
