Core Insights - Ecuador's cocoa production is projected to exceed 650,000 tons by the 2026/27 season, potentially overtaking Ghana as the world's second-largest cocoa producer [1] - The global cocoa price reached a historical high of over $12,000 per ton due to poor harvests and diseases affecting Côte d'Ivoire and Ghana, which supply about half of the world's cocoa [1] - Ecuador's public and private sectors are increasing investments in cocoa cultivation, utilizing agroforestry models that support biodiversity to prevent disease spread, leading to steady production growth [1] Production Forecast - Ecuador's cocoa production is expected to surpass 570,000 tons by the 2025/26 season and may exceed 800,000 tons by 2030 [1] - The shift in production dynamics is attributed to Ghana facing challenges such as illegal gold mining encroaching on cocoa farmland and the spread of swollen shoot disease [1]

Cocoa Prices and Market Dynamics - Cocoa prices are currently rising, with December ICE NY cocoa up by 0.88% and December ICE London cocoa up by 1.45%, driven by weather concerns in West Africa [1] - Heavy rainfall in the Ivory Coast has hindered farmers' access to cocoa fields, while dryness in Ghana and Nigeria has negatively impacted crop health [1] - Tighter cocoa inventories in the US, which have fallen to a 3.75-month low of 2,123,868 bags, are also supporting price increases [3] Supply and Demand Factors - Cocoa prices had previously dropped to 1.5-month lows due to expectations of increased supply amid weakening demand, with notable declines in chocolate sales reported by major companies [4] - Optimism regarding this year's cocoa crop harvest in West Africa is present, with a cocoa pod count reported to be 7% above the five-year average [5] - The pace of cocoa exports from the Ivory Coast has slowed, with shipments reported at 1.81 million metric tons, a 5.8% increase from last year but lower than previous months [7] Quality and Production Concerns - Quality issues with the Ivory Coast's mid-crop cocoa, attributed to late rain, are contributing to price support, with an estimated mid-crop of 400,000 metric tons, down 9% from last year [8] - Nigeria's cocoa production is projected to decline by 11% year-on-year to 305,000 metric tons for the 2025/25 crop year, which may also support cocoa prices [9] Global Demand Trends - Weakness in global cocoa demand has been a bearish factor, with significant declines in cocoa grindings reported in Europe (-7.2%), Asia (-16.3%), and North America (-2.8%) [10] - Ghana's projected increase in cocoa production by 8.3% year-on-year to 650,000 metric tons for the 2025/26 crop year may exert downward pressure on cocoa prices [11] Global Cocoa Market Outlook - The International Cocoa Organization has revised its 2023/24 global cocoa deficit to 494,000 metric tons, the largest in over 60 years, while forecasting a surplus of 142,000 metric tons for 2024/25 [12]

Economic Growth and Recovery - Côte d'Ivoire has achieved an average economic growth rate of 7% over the past decade, emerging from the devastation of civil wars to become a leading economy in Sub-Saharan Africa [1] - Following the end of conflicts in 2011, the government implemented a national development plan that led to an average GDP growth of approximately 9.6% from 2012 to 2015 [5][6] Agricultural Sector and Cocoa Industry - Côte d'Ivoire is the world's largest cocoa producer, contributing 40% of global cocoa beans, but has historically been trapped in low-value raw material exports [7] - The government aims to achieve 100% local processing of cocoa beans by 2030, with current local conversion rates at about 33% [10] - A new state-owned cocoa processing plant, capable of processing 50,000 tons annually, has recently commenced operations [10] Infrastructure Development - Côte d'Ivoire is the second-largest economy in the West African Economic Community and is actively enhancing its infrastructure to become a regional economic hub [13] - The country has a total road length of 82,500 kilometers, accounting for 50% of the total road length in the West African Economic and Monetary Union [16] - The Abidjan port, the largest container port in West Africa, has increased its annual throughput from 1.2 million to 2.5 million standard containers after upgrades [16] Private Sector Activation - The government has adopted a "flooding the market" approach to stimulate the private economy through policy relaxation and market opening [17] - In 2023, over 25,000 new businesses were registered in Côte d'Ivoire, reflecting a vibrant entrepreneurial environment [17] - The collaboration between public and private sectors has resulted in an average economic growth rate of 6.5% from 2021 to 2023, despite global challenges [17]

Group 1 - West Africa, the largest cocoa-producing region, is facing another disappointing harvest season due to structural issues like aging trees and crop diseases, despite improved weather conditions [1] - Ivory Coast is expected to harvest 1.4 million tons of cocoa beans from October to March, while Ghana's forecast is much bleaker at only 620,000 tons, significantly below historical highs, indicating continued global cocoa supply tightness [1] - The inventory-to-use ratio, a key indicator of supply and demand, is near its lowest level since 1981, with U.S. cocoa inventories also significantly below the 10-year average [1] Group 2 - Cocoa supply shortages will pressure chocolate manufacturers and keep cocoa and related product prices high, with current cocoa futures prices still well above the five-year average despite a 40% drop from last December's peak [4] - JPMorgan predicts cocoa prices will remain above $6,000 per ton, with the market expected to trade at high levels for the long term, while Citigroup forecasts prices could reach $7,000 per ton next year, more than double the long-term average [4] Group 3 - The next three months are critical for cocoa pod development, with potential drought conditions in August posing risks to the harvest [7] - Cameroon is a bright spot in the region, with cocoa production expected to increase by 12% to 300,000 tons, while Nigeria's production is projected to decline by 11% to 305,000 tons due to adverse weather patterns [7] - Even if cocoa production in West Africa recovers, it will start from a low base after two poor seasons, threatening the region's dominance in the global cocoa market amid expanding capacities in countries like Ecuador [7]

Core Viewpoint - Nigeria plans to establish a Cocoa Management Committee to enhance cocoa bean production [1] Group 1 - The initiative aims to improve the overall yield of cocoa beans in Nigeria [1] - The Cocoa Management Committee will focus on implementing best practices in cocoa farming [1] - This move is expected to position Nigeria as a leading player in the global cocoa market [1]

Core Viewpoint - Brazil is seizing the opportunity to create the world's largest cocoa farm in response to a significant increase in demand and a supply shortage caused by adverse weather, aging trees, and crop diseases [3][9]. Group 1: Market Conditions - Global cocoa production has significantly declined due to factors such as climate change, aging trees, and pest issues, particularly in the leading cocoa-producing countries, Côte d'Ivoire and Ghana, which have experienced poor harvests for three consecutive years [9]. - Cocoa futures prices have reached record highs, exceeding $12,000 per ton at one point, and currently hover around $8,000 per ton, indicating strong market demand despite supply constraints [9]. Group 2: Brazil's Cocoa Farming Initiative - The cocoa farm in Bahia, Brazil, has reached an area of 400 hectares, which is substantially larger than most cocoa farms globally, typically only a few dozen hectares [5]. - The farm's yield is approximately 3,000 kilograms per hectare, which is ten times the average yield of traditional cocoa-producing areas in Brazil [5]. - Brazil's government anticipates an increase in cocoa production to 300,000 tons by the end of this year and aims for 400,000 tons by 2030 [9].