Ivory Coast and Ghana, the world’s largest cocoa producers, will get rains over the next seven days, potentially helping crop development, according to the U.S. National Oceanic and Atmospheric Administration.
Most areas of top grower Ivory Coast and second-ranking Ghana will get 30 millimeters (1.18 inches) to 40 millimeters of rain through June 21, data on the NOAA website today show. Some areas on the coasts of both countries will get between 75 millimeters and 100 millimeters, the data show.
Wet weather may help crop development after dryness earlier this year delayed the start of the mid-crop, the smaller of two annual harvests. Rainfall levels in Ivory Coast in the first 10 days of June were below historical averages, data from the country’s National Meteorological Service show. Concerns about weather for this season and the next have helped cocoa to gain 3.3 percent on NYSE Liffe in London this week.
“The bull community seems to be growing by the day and the argument is based on fundamental changes,” Eric Sivry, the London-based head of the agriculture options brokerage at Marex Spectron Group, said in a report e-mailed today. “One of the key aspects is a greater evidence of an El Nino weather pattern for the next season.”
El Nino conditions, a warming of the mid-Pacific Ocean that causes rains in cocoa areas in Ecuador and dry weather in third-biggest grower Indonesia, are likely to develop in the coming months, according to Australia’s Bureau of Meteorology. The weather pattern usually results in a 2.4 percent drop in global production and could exacerbate a shortage next season, the International Cocoa Organization in London said.
Ghana’s cocoa production will fall to 850,000 metric tons in the season that ends on Sept. 30, down from 1.1 million tons a year earlier, according to industry regulator Ghana Cocoa Board. The drop was caused by below-average rain late last year, Chied Executive Officer Tony Fofie said in an interview at an industry event in Washington today.