Cargill sees the cocoa market broadly balanced in the current 2017/18 season and is aiming to expand its processing capacity in producer countries, the company's commercial director for cocoa said on Tuesday. Crops in West Africa got off to a strong start in 2017/18, but production tapered off, reducing the chance of another global surplus, Cargill's Francesca Kleemans told Reuters on the sidelines of a conference in Berlin.
"The 2017/18 season got off to a good start," she said. "However, we are not expecting that same level of surplus. So we're more looking at a balanced supply and demand outlook." The market saw a large surplus in the 2016/17 season, which the International Cocoa Organization (ICCO) has estimated at 300,000 tonnes, pressuring global prices to their lowest in more than nine years.
Kleemans pegged the more balanced market in 2017/18 on a combination of smaller crops in West Africa and more global demand, partly due to lower prices. "We are seeing demand accelerating, which has been helped by the price," she said. "And of course, we're expecting lower crops than the record levels of last year." Kleemans noted the mid-crop outlook in West Africa was positive, as drier weather in February was offset by good rains last month.
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