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Mild desert winds spell good news for cocoa crop in top producer

[ABIDJAN] A record crop in biggest producer Ivory Coast helped push the cocoa market into a surplus in the 2016-17 season. Prices tumbled and are headed for a second annual decline.

With the 2017-18 season now well under way, all eyes are on the main crop, the larger of two yearly harvests that runs from October through March. Now is a crucial time as the harvest's at its peak. The Harmattan, dry desert winds from the Sahara, usually blow from December to February and can have a big impact on crops in Ivory Coast and neighboring Ghana.

Here's what we know about the harvest so far.

Ivory Coast's cocoa regulator, Le Conseil du Cafe Cacao, has increased its forecast for the 2017-18 main crop harvest to 1.4 million to 1.45 million tons from a previous 1.35 million tons, a person familiar with the matter said last week.  Good rains in the past few months mean that production will probably be higher than anticipated for the second part of the main crop, starting in January, said the person, who asked not to be identified because the projection hasn't been made public. The forecast assumes that the Harmattan remains mild and doesn't damage cocoa pods.

After heavy rains in October and November, the Harmattan is now under way in most of the cocoa-growing regions. But it's been mild so far and it's often mixed with light rains, said Joseph Gueu, a farmer near Danane in the west of the country. That's unusual for this time of year. Output has been good so far and young pods are growing well, he said.  Not everyone is so positive though. Too much rain has resulted in brown rot on many pods and reduced production, said Alassane Sogodogo, who manages a cooperative near the Liberian border. The rain also damaged roads in the area, making it difficult to send cocoa to the port. The weather has since improved, he said.

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Three Abidjan-based cocoa exporters surveyed by Bloomberg News said they expect main-crop production of about 1.4 million tons.  Total arrivals to the ports of Abidjan and San Pedro totaled 661,000 tons through Dec 17 since the season started Oct 1, about in line with the same period last season. Weekly deliveries to the harbors accelerated in recent weeks and were above 70,000 tons since mid-November, compared with 50,000 or less in the four weeks of October.

A recent decline in near-dated cocoa contract prices has been fueled by reports of positive expectations for 2017-18 crop output resulting from the outlook for a mild Harmattan in the main cocoa producing areas in Ivory Coast, the ICCO said in a monthly report.

Assuming the desert winds remain mild, most market participants expect a good harvest for the current season, although probably smaller than last season, the ICCO said last month in a separate report.


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