Changes in growing patterns have made world cocoa more susceptible to weather evidents – as evident in the scale of the world production drop this season, renowned soft commodities analysis group Armajaro Research said.
Growth in world cocoa production has been driven in West Africa by expansion in the smaller, so-called mid-crop, harvested in Cote’ d’Ivoire and Ghana between May and Africa, Laurent Souron, head of cocoa research at Armajaro Research said.
In Cote’ d’Ivoire, the world’s top cocoa producer, mid crop output soared from 120,000 tonnes in 1994-95 to 528,000 tonnes in 2014-15, helped by improved farming techniques and government incentives which have encouraged local consumption of smaller beans often produced by this harvest, he said.
Meanwhile, output growth in the rest of the world has reflected largely expansion in Ecuador, where “production has been increasing very fast”, as area planted to cocoa has increased.
However, both dynamics have left output more vulnerable to weather upsets of the kind seen in 2015-16, when the world saw – unusually – both a significant El Nino and a strong Harmattan, the dry and yield-curbing wind which blows south into Ivory Coast and Ghana from the Sahara.
“The last time we had a big Harmattan was in 1994-95, and the last time we had a big El Nino was in 1997-98,” Mr Souron told the ICCO cocoa market outlook conference in London, stressing the rare nature of both occurring in the same season.
And the Harmattan – which blows from December to February, but lasted into March this year – hurts mid crop rather than main crop output, he said, flagging “big anomalies” in the success of this harvest caused by weather conditions.
Meanwhile, Ecuadorian output is particularly susceptible to El Nino weather patterns, which in causing undue wetness encourage the spread of cocoa disease in South Americas top producing country, and depress yields.
“If we had not had El Nino, I think Ecuadorian output would have broken 300,000 tonnes, maybe even 320,000 tonnes,” Mr Souron said.
Global production has “become more susceptible” to big weather events, Mr Souron told Agrimoney.com, if noting that Ecuador’s vulnerability profile to El Ninos had been reduced a little by expansion of plantations into drier areas.
In fact, Armajaro Research, which advises cocoa and coffee hedge fund manager Armajaro Asset Management, has discovered some relationship, albeit “non-linear”, between El Nino episodes, which are linked to above-average Pacific water temperatures, and Ecuadorian cocoa output.
Every 1 degree Celsius rise in the Enso indicator, a key signal of El Nino conditions, tends to depress Ecuadorian output by 15-20%.
Meanwhile, for Harmattans, every day the wind blows tends to depress Cote d’Ivoire mid crop output by some 1%, he said, estimating this year’s harvest at 46% below the level suggested by trend growth.
(Source – http://www.agrimoney.com/news/changes-in-cocoa-output-map-boost-vulnerability-to-weather-setbacks–9974.html)