On Thursday, the International Cocoa Organization (ICCO) released its monthly report that specified a massive surplus in global cocoa was reported for the 2020/21 season that runs through to the end-September.
ICCO recorded a surplus of about 100,000 tons for the 2020/21 season, which compares with a surplus of 19,000 tons for the 2019/20 season.
Cocoa’s demand slump could be due to less chocolate consumption among consumers as many restaurants, resorts, movie theaters, concerts, and other entertainment forms have had capacity limitations or closed in the last year.
For instance, cocoa processors are not expecting a revival in demand this year as the virus pandemic suppresses air travel and consumer spending around the world, according to Bloomberg.
Cocoa Association of Asia said chocolate demand could increase in the second half the year as travel restrictions are lifted if vaccine roll-outs are successful.
“In terms of absolutely strong recovery in the next couple of quarters, that’s a tall ask,” chairman Alvin Lee said, adding that several countries are seeing new waves of infection.
“The second half could be stronger because of a combination of increasing demand and restocking.”
Cocoa-ICCO’s daily pricing in dollars per metric ton shows prices remain under 2019 levels and range bound since COVID lockdowns.