Price risk management training project begins in West Africa

The ICCO launched its project Capacity building on price risk management strategy for cocoa smallholders in Africa in Cameroon and Nigeria in late April, with capacity building workshops held in Yaoundé and Abuja.

Implemented by the well known NGO Twin, the workshops attracted participation from cocoa farmers, co-operatives, producers associations, local banks and government officials. Similar workshops are already planned for Sierra Leone and Togo in the coming months.

The workshop participants discussed the results of a farm survey on the current price-risk management practices adopted in Cameroon and Sierra Leone. It emerged that only five per cent of interviewed cocoa producers are managing their price risk exposure either by negotiating the sale price before the delivery takes place (i.e. forward contracts), or by employing more sophisticated strategies (i.e. futures contracts). Furthermore, most farmers have misconceptions about how the world cocoa price is derived and the role of cocoa futures markets.

After this initial stage in the capacity building process, local cocoa stakeholders will go on to attend an intense training programme to fill these knowledge gaps. Subsequently, the Project Co-ordinators of each implementing country will contract some of these trained stakeholders to provide technical assistance to cocoa co-operatives on the ground.

The ultimate project goal is to increase the awareness of local cocoa stakeholders about price risk and about the means to reduce its detrimental effects on farm income. Indeed, the mitigation of the farm gate price risk is one of the pillars underpinning the reduction of the poverty level of cocoa farmers. Specifically reducing income uncertainty puts producers in a better position to plan both their current farm management practices, and their investment decisions. By doing so, positive spill over effects are expected on farm productivity.

The current project has been made possible by project grants from the Common Fund for Commodities (CFC) and the Agence Française de Développement (AFD).

ICCO recommends a review of cocoa resources at Abidjan Council meeting


Abidjan, 27 March 2015—The world’s largest cocoa producing countries should marshal their resources with a view to avoiding oversupply in the future and helping ensure equitable prices, ICCO Executive Director Dr Jean-Marc Anga told attendees at the opening of the 91st session of the International Cocoa Council in Abidjan in late March.

The meetings, kindly hosted by the Government of Côte d’Ivoire, the world’s largest cocoa producing country, were officially opened by Côte d’Ivoire’s Prime Minister, H.E. Mr. Daniel Kablan Duncan, and attended by H.E. Mr. Jean Louis Billon, Minister of Trade, Agriculture Minister H.E. Mr. Sangafowa Coulibaly, and dignitaries from several of the Organization’s 48 member countries. (Photo of the official opening session, above, from Abidjan.net)

The week-long session included meetings of the ICCO’s Economics and Administration and Finance Committees, as well as of the Consultative Board on the World Cocoa Economy, which includes representatives of the major processors, chocolate manufacturers, and NGOs involved in the cocoa sector.

Dr. Anga’s presentation called on the five largest producing countries to conduct an inventory of their cocoa resources, and develop national strategies in line with demand, so as to avoid a negative effect on the market and on the price that farmers receive for their cocoa.

The meetings reported on all of the ICCO’s planned projects and activities, and on a number of upcoming events, including the first official announcement of the third edition of the successful World Cocoa Conference. Dr. Anga explained that the Conference, kindly hosted by the Government of the Dominican Republic, has been rescheduled for late May 2016 at the Barceló Bávaro Convention Center, Punta Cana in the Dominican Republic. (The initial brochure for the Conference is available for download by clicking here).

During the meetings, the African Export-Import Bank (Afreximbank) reported on the Memorandum of Understanding (MOU) between the bank and the ICCO signed in November 2014, under which the two institutions agreed to boost the development of the cocoa sector by promoting value addition through cocoa processing, strengthen capacity in building cocoa projects and project finance, and promote the consumption of cocoa products in Africa and Asia.

Delegates at the meetings discussed issues as diverse as profitable farm models, a proposed global sustainability fund, fine or flavour cocoa and the policy implications of long-term trends in global cocoa prices. They also had presentations by the Food and Agriculture Organization (FAO) and the World Trade Organization (WTO).

Regarding the Council’s previous decision to move the headquarters of the Organization from London to Abidjan – a final discussion on which will take place at the next meetings in September 2015 – it was decided that the Secretariat would oversee the work of an accounting firm assigned to investigate both the costs of relocation and the potential ongoing costs of the ICCO operating in the Ivorian commercial capital.

Also during the meetings, a special seminar on Voluntary Standards in Cocoa Sustainability, presented by the Geneva-based International Trade Centre, attracted a hundred participants, mostly from the Ivorian cocoa trade and industry.

Presentations made at the 91st Council meetings in Abidjan (click on the titles to download):

ICCO-ITC Seminar on Voluntary Sustainability Standards

The International Trade Centre and the ICCO are to hold an afternoon seminar on Voluntary Sustainable Standards in the cocoa sector at the Hotel Sofitel Ivoire, Abidjan,  in Abidjan on 24 March 2015.

This event is intended for policy makers, staff from national institutions in charge of the cocoa sector, cocoa cooperatives, cocoa farmers’ associations, relevant NGOs, local staff of certification systems, cocoa buyers and private cocoa and chocolate companies. It is open, free-of-charge to all.

For more details on the content and to register, please click here for information in English.

L’International Trade Centre en collaboration avec l’Organisation internationale du cacao (ICCO) organisent un séminaire sur les normes volontaires de durabilité, qui aura lieu à l’Hôtel Sofitel Ivoire à Abidjan, le mardi 24 mars 2015.

Cet événement s’adresse aux décideurs politiques, au personnel des institutions nationales chargées du secteur cacaoyer, aux coopératives cacaoyères, aux associations de cacaoculteurs, aux ONG concernées, au personnel local des systèmes de certification, aux acheteurs de cacao et aux sociétés privées du secteur du cacao et du chocolat. Il est gratuit et ouvert à tout les intéréssés.

Pour de plus amples informations sur le contenu et les modalités d'inscription en français, veuillez cliquer ici.

February 2015 Quarterly Bulletin of Cocoa Statistics

London, 27 February 2015–The International Cocoa Organization today releases its first forecasts for the 2014/2015 cocoa year and revised estimates of world production, grindings and stocks of cocoa beans for 2013/2014, as summarized below. The data published in Issue No. 1 – Volume XLI – Cocoa year 2014/2015 of the Quarterly Bulletin of Cocoa Statistics, reflect the most recent information available to the Secretariat as at the beginning of February 2015.

Summary of forecasts and revised estimates

 

Cocoa year
(Oct-Sep)		 2013/2014 2014/2015 Year-on-year change
Previous estimates a/ Revised estimates Forecasts
(thousand tonnes) (Per cent)
World production 4 365 4 355 4 232 – 123 – 2.8%
World grindings 4 268 4 281 4 207 – 74 – 1.7%
Surplus/deficit b/  + 53  + 30  – 17
End-of-season stocks 1 659 1 626 1 609 – 17 – 1.0%
Stocks/Grindings ratio 38.9% 38.0% 38.2%

 

Notes:
a/   Estimates published in Quarterly Bulletin of Cocoa Statistics, Vol. XL – No. 4 – Cocoa year 2013/2014
b/   Surplus/deficit: Net world crop (gross crop adjusted for loss in weight) minus grindings
Totals may differ due to rounding.

This issue of the Bulletin contains the Secretariat’s first forecasts for the 2014/2015 cocoa year as well as data for the past four years of production and grindings of cocoa beans, detailed by country. The main features of the global cocoa market are illustrated in colour charts. In addition, the Bulletinincludes comments on crop and demand prospects in the leading countries for the current season, and a review of price developments on international markets for cocoa beans during the October-December quarter of 2014.

Statistical information on trade in cocoa beans, cocoa products and chocolate, by country and by region, published in this edition, covers annual data from 2010/2011 to 2012/2013 and quarterly statistics for the period October-December 2012 to April-June 2014. Details of origin of imports and destination of exports for leading cocoa importing countries are also provided. Historical statistics on cocoa trade and consumption, by country and by region, for the period 2004/2005 to 2012/2013 are presented for reference.

Copies of the Quarterly Bulletin of Cocoa Statistics, including Microsoft Excel files and Adobe PDF format, can be ordered by completing and returning this form or from the ICCO Secretariat at the address below:

International Cocoa Organization
Westgate House
Ealing
London W5 1YY, UK

Tel:              +44 (0)20 8991 6000
Fax:             +44 (0)20 8997 4372
E-mail:         registry@icco.org or info@icco.org

Seminar on Cocoa Projects set for Accra in June

Following a decision taken by the International Cocoa Council at its 88th regular session in September 2013, the ICCO is to hold an International Seminar on the Development, Implementation and Evaluation of Cocoa Projects, which is being generously hosted by the Ghana Cocoa Board (Cocobod), at the Holiday Inn Hotel, Accra, Ghana, 9 – 12 June 2015.

The seminar is intended for relevant officials and policy makers from ICCO exporting member countries, who are involved in cocoa development programmes and projects, as well as for companies, and for not-for profit development institutions in African cocoa-producing countries. It aims to strengthen their skills and capacity to identify cocoa development projects, and to formulate, implement and evaluate them to the satisfactory requirements of both local and international donor and lending institutions.

The full programme of the seminar, along with practical arrangements for attendees, a registration form and details of special hotel rates kindly arranged by the Ghana Cocoa Board, are available here. Le programme intégrale du séminaire, ainsi que des informations utiles aux participants, le formulaire d'inscription, et les informations concernant les tarifs hôteliers spécialement négociés par le Ghana Cocoa Board, y sont disponibles.

All enquiries related to the seminar programme should be directed to Mr. Moisés Gómez, Project Officer (Telephone: +44 20 8991 6007 / 00; Email: moises.gomez@icco.org).

All enquiries related to registration and other practical arrangements should be directed to Mr. Philippe Pestelle, (Telephone: +44 20 8991 6019 / 00; Email: philippe.pestelle@icco.org).

Seminar partners:

                          

Assessment of world cocoa bean stocks for 2013-14

London, 23 January 2015 — The ICCO Expert Working Group on Stocks (EWGS) met today to review the level of world cocoa bean stocks. The EWGS is composed of experts in the cocoa field who meet once a year, at the invitation of the ICCO, to review and analyse the results of the ICCO’s annual survey of cocoa stocks held in warehouses worldwide. The survey has been conducted every year since 2000, and aims to improve transparency in the cocoa market.

The result of the latest survey showed that world cocoa bean stocks fell to 1.508 million tonnes, as at the end of the 2013/2014 cocoa year (30 September 2014) – a figure 19,000 tonnes lower than the previous year. This means that demand may have slightly outpaced net production in the 2013/2014 season. This result differs from the statistically-derived estimate published by the ICCO in November 2014 in its latest Quarterly Bulletin of Cocoa Statistics (QBCS), showing a supply surplus of 53,000 tonnes.

The EWGS would like to note that caution should be exercised in the interpretation of the difference between the results of the survey and the statistically derived stocks.

The EWGS now notes that a cumulative gap of 151,000 tonnes has developed between the annual survey of cocoa stocks held in warehouses worldwide and the ICCO’s statistically-derived stocks figure. The EWGS suggests that the following factors may have contributed to this difference:

  • Increase in stocks held in locations not reporting to the ICCO survey, such as in Indonesia; and
  • Cocoa beans in transit higher than estimated.

While the ICCO Secretariat maintains, so far, its supply surplus estimate of 53,000 tonnes as published in its latest QBCS as its official estimate for 2013/2014, it may revise that figure in the next edition of the QBCS due at the end of February 2015, taking into account the outcome of this survey.

International Cocoa Council and subsidiary bodies, 23 – 27 March 2015, Abidjan, Côte d’Ivoire

The International Cocoa Council and subsidiary bodies, including the Consultative Board on the World Cocoa Economy, as well as the Economics and Administration and Finance Committees, will meet at the Hotel Sofitel Ivoire, Abidjan, Côte d’Ivoire, 23 – 27 March 2015.

Provisional Timetable of Meetings, 23 – 27 March 2015, Abidjan, Côte d’Ivoire

ED(MEM) 977 – Rev 2 – English Only
English French Spanish Russian

Arrangements for the March 2015 meetings

ED(MEM) 978
English French Spanish Russian

International Cocoa Council: Draft Agenda

ICC-91-1 – Rev 1
English French Spanish Russian

Administration and Finance Committee: Draft Agenda

AF-5-1 – Rev 1
English French Spanish Russian

Economics Committee: Draft Agenda

EC-5-1 – Rev 1
English French Spanish Russian

Consultative Board on the World Cocoa Economy: Draft Agenda

CB-30-1 – Rev 1
English French Spanish Russian

ICCO and Afreximbank sign collaboration agreement on cocoa development

London, 5 December 2014—Sealing a wide-ranging international programme of collaboration, the International Cocoa Organization (ICCO) and the African Export-Import Bank (Afreximbank) on 28 November signed a Memorandum of Understanding (MOU) in Cairo, Egypt, where the bank is based.

The MOU aims to boost the development of the cocoa sector in Africa, foster the long-term competitiveness of smallholder cocoa farmers and support the local cocoa and chocolate products industry, to reinforce their capacity to participate in global trade.

Under the terms of the MOU, the ICCO and Afreximbank are to work together to develop activities, secure funding as well as devising and implementing projects.

Activities would include enhancing the sustainability of the cocoa value chain in Africa, increasing the capacity of cocoa farmers to improve their productivity, and supporting value addition in the countries by establishing new cocoa processing facilities and strengthening existing ones. Another significant part of the agreement would see the two organizations promoting cocoa and chocolate products consumption in Africa and in emerging markets, and focussing particularly on China and other Asian markets.

Regarding the huge potential Chinese market for cocoa, the two organizations agreed to examine the feasibility of a promotion campaign, including producing a market study to provide information to African cocoa exporters.

Afreximbank, through its successful African Cocoa Initiative (AFRICOIN) was already involved in many of the activities identified in the MOU, the Bank’s president Jean-Louis Ekra said, confirming that the bank had provided about $350 million in financing to support cocoa processing in the four major African cocoa producing countries. He estimated that another $400 million of funding would available to finance a broad range of cocoa development projects to improve the situation for cocoa stakeholders in the region.

ICCO Executive Director Dr Jean-Marc Anga said that he welcomed the opportunity to collaborate with Afreximbank, and highlighted the importance of supporting the processing of cocoa by indigenous businesses in Africa. He further stressed that the African cocoa sector has a great future and that the possibilities for transformational change in the region are tremendous.

Pictured: Afreximbank’s President Jean-Louis Ekra (left) exchanges documents with ICCO Executive Director Jean-Marc Anga at the signing.

November 2014 Quarterly Bulletin of Cocoa Statistics

London, 28 November 2014–The International Cocoa Organization today releases its revised estimates, summarized below, of world production, grindings and stocks of cocoa beans for the 2013/2014 cocoa year. The data published in Issue No. 4 – Volume XL – Cocoa year 2013/2014 of the Quarterly Bulletin of Cocoa Statistics, reflect the most recent information available to the Secretariat as at the beginning of November 2014.

Summary of revised estimates

 

Cocoa year
(Oct-Sep)		 2012/2013 2013/2014 Year-on-year change
Revised
estimates		 Previous
estimates a/		 Revised
estimates
(thousand tonnes) (Per cent)
World production 3 945 4 345 4 365 + 420 + 10.6%
World grindings 4 128 4 262 4 268 + 140 + 3.4%
Surplus/deficit b/ – 222  + 40  + 53
End-of-season stocks 1 606 1 660 1 659 + 53 + 3.3%
Stocks/Grindings ratio 38.9% 38.9% 38.9%

Notes:
a/   Estimates published in Quarterly Bulletin of Cocoa Statistics, Vol. XL – No. 3 – Cocoa year 2013/2014
b/   Surplus/deficit: net world crop (gross crop adjusted for loss in weight) minus grindings
Totals may differ due to rounding.

This issue of the Bulletin contains the Secretariat’s revised estimates for the 2013/2014 cocoa year as well as data for the past four years of production and grindings of cocoa beans, detailed by country. The main features of the global cocoa market are illustrated in colour charts. In addition, the Bulletin includes comments on crop and demand prospects in the leading countries for the current season, and a review of price developments on international markets for cocoa beans during the 2013/2014 cocoa year.

Statistical information on trade in cocoa beans, cocoa products and chocolate, by country and by region, published in this edition, covers annual data from 2010/2011 to 2012/2013 and quarterly statistics for the period July-September 2012 to January-March 2014. Details of destination of exports and origin of imports for leading cocoa exporting countries are also provided. Historical statistics on cocoa trade and consumption, by country and by region, for the period 2004/2005 to 2012/2013 are presented for reference.

Copies of the Quarterly Bulletin of Cocoa Statistics, including Microsoft Excel files and Adobe PDF format, can be ordered by completing and returning this form, or from the ICCO Secretariat at the address below:

International Cocoa Organization
Westgate House
Ealing
London W5 1YY
United Kingdom

Tel:             +44 (0)20 8991 6000
Fax:            +44 (0)20 8997 4372
E-mail:        registry@icco.org or info@icco.org

ICCO Statement on Reports of a Cocoa Supply Deficit in 2020

London, 21 November 2014–The  International Cocoa Organization (ICCO) has noted numerous press reports this week identifying potential deficits in the supply of cocoa in the years to come, possibly reaching a level of one million tonnes in the year 2020, and would like to emphasize that its projections in no way bear out this fear, which it finds to be overstated in the extreme.

The ICCO would like to recall the following facts to ensure, as far as possible, an informed assessment of the current situation and future prospects for the supply of cocoa to the chocolate confectionery market and to other cocoa ingredient applications:

  • In the past ten years, the cocoa market experienced five years with production surplus and five years with production deficit. The last cocoa season (2013/2014), just ended in September 2014, experienced a production surplus, with the two leading producing countries, Côte d’Ivoire and Ghana, each posting record production;
  • The price for cocoa beans has varied widely over the years and is currently below the historical (1850 – 2014) median level in real terms (adjusted for inflation);
  • Cocoa production responds to changing price and therefore it cannot be assumed that, in the medium term (taking into consideration the lag between planting new trees and harvesting beans), demand will continue to grow and supply will either remain flat or decline. Cocoa, like any other agricultural commodity, is a renewable resource, so, when the cocoa price goes up, farmers will be incentivised to produce more cocoa beans by increasing their use of inputs and investing in new plantations.

As far as the ICCO’s current projections are concerned, there is no immediate cause for concern about the supply of cocoa for the next five years. There has been a tight relationship between supply and demand over the years and, while our projections show that supply deficits are likely to occur during the next several years, stocks of cocoa beans should cushion this development before production growth accelerates. There is no threat to the supply of cocoa for chocolate manufacture.

A number of the media reports highlighted many of the problems – sustainability, pests and diseases and especially the disadvantaged situation in which many cocoa farmers find themselves – which are at the heart of the work of the ICCO, its member countries and its partners worldwide. The ICCO’s ongoing process, identified in the Global Cocoa Agenda, seeks to deal with these serious issues. The Organization and its partners most recently reviewed progress in these areas at its World Cocoa Conference in Amsterdam in June. (A report of the Conference and many of the presentations made there can be found here).

The ICCO continues to make projections and forecasts based on the actual supply situation in the cocoa producing countries and the ongoing demand from the cocoa consuming nations, and will report on any significant change if and when it occurs. In the meantime, it believes that there is no cause for alarm regarding the availability of chocolate for consumers to enjoy.