West Africa's world cocoa share falls

West Africa's world cocoa share falls

ABIDJAN (Reuter): West Africa's share of world cocoa output is seen falling for the first time in five years in 1996/97 due to a smaller crop in top grower Ivory Coast and increasing output from the main Asian producer Indonesia, trade analysts say.

"People have not really caught on to the fact that Indonesia will be number two by a long margin next year and will continue growing," one crop forecaster told Reuters on Friday.

Regional cocoa traders in Singapore recently forecast the Indonesian crop continuing to expand, reaching as much as 500,000 tons by the year 2000.

But trade sources said output from Ivory Coast and the current number two grower, Ghana, would be substantially lower in 1996/97.

They said Ivory Coast's hybrid trees could be exhausted after a record 1995/96 (October-September) harvest.

They put the 1996/97 main crop at 800,000 to 850,000 tons, against almost one million tons this year.

The total 1995/96 harvest will be about 1.2 million tons when the mid-crop is added, against the previous record of 880,000 tons in 1994/95.

Ideal weather at critical crop development times has also lifted 1995/96 harvests for other West African producers.

Neighboring Ghana is forecast to yield close to 400,000 tons, its best harvest for 20 years, and Nigeria and Cameroon are expected to produce 140,000 and 120,000 tons respectively.

Total output from West and Central Africa is seen close to two-thirds of world production of 2.8 million tons. But a big jump in Indonesian output will reduce this dominance next year.

This year, however, Asia's market share may fall slightly because Malaysia has not improved on its weak 1994/95 showing.

Malaysian cocoa production is much more industrialized than the small-scale West African operations and plantation managers have been quick to change to more lucrative crops like oil palm. High production costs have also spurred the move out of cocoa.

Officials say the cocoa area fell to 243,000 hectares last year from 430,000 in 1990, and over five years output fell to 152,000 tons from 247,000 tons. Less is expected this year.

But Malaysia's fall has been mirrored by Indonesia's rise.

Ten years ago the vast island nation grew less than 50,000 tons. Farmers found they could make good money from the crop and expanded their farms. Yields rose as young trees reached maturity and this year's output is close to 300,000 tons.

"They are starting to run out of land in Sulawesi but one of the other islands may take off. Kalimantan, which has some cocoa on it, could be ideal. If that takes off you could have another 200,000 tons," a crop analyst said.

But unlike Africa, Indonesia faces the threat of pod borer pest, a larva that burrows into cocoa pods harming the beans.

Researchers say it is spreading in the main growing areas of Sulawesi. It reduced the island's output by just two or three percent this year but officials say it must be tackled quickly to stop heavier losses.

"It is the biggest problem the sector faces. The government must act fast as after it is spread out it will be difficult to control," Indonesian Cocoa Association chairman Litha Brent told Reuters in June.

Natural enemies have had a more serious impact in the top South American producer, Brazil, where the fungal witches' broom disease and tough economic conditions have led to a big fall in output.

Witches' broom was introduced to Bahia from the Amazon, cocoa's natural home, about seven years ago. Now it is found on 95 percent of farms.

"Particularly in the last two years it has had a considerable impact on yields," one crop analyst said.

There is no effective cure and the recommended control is to cut out infected shoots.

Farmers have struggled to afford labor for this time-consuming task and output has slumped to just 220,000 tons from almost 380,000 tons five years ago.

To make matters worse, drought has hit the developing 1996/97 main crop and it is expected to yield much less than average.

"The 1996/97 production will be down in Bahia because the main crop has quite clearly been badly affected by the unusually dry weather," the crop analyst told Reuters.

Trade analysts say Asia could claim even more market share from South America and from West Africa if the newest emerging economies in the region latch on to cocoa as a hard cash earner.

Vietnam has become as a major robusta coffee grower over the past five years and some analysts see good potential for cocoa.

"The climate is just perfect and the people are very entrepreneurial. They don't have a huge space to grow it in but I could see it coming up to Nigeria's league of producers of 100,000-150,000 tons, which is significant," one said.