El Nino’s impact on global cocoa output remains uncertain
Ecuador, Brazil boosting global cocoa supply diversification
Product changes may limit cocoa demand despite stronger snacking

By Naveen Thukral

SINGAPORE, Sept 2 (Reuters) - Ample cocoa stockpiles should help cushion any hit to global production from adverse weather, a Mondelez International (MDLZ.O) executive said on Wednesday, even as concerns about tighter supplies and El Nino risks drive up cocoa prices.

“There is a healthy cocoa inventory, it provides a buffer to any supply variations that we might see,” Darren O’Brien, the Cadbury parent’s chief cocoa officer, said. “So if we have a small deficit, there’s a good buffer.”

London (LCCc2) and New York cocoa (CCc2) prices have surged about 75% and 80% respectively since June, driven by expectations of a shrinking global surplus and concerns that El Nino weather could disrupt output in West Africa, the world’s main cocoa-growing region.

But O’Brien said it was too early to assess the impact of the weather pattern on global production.

“There is an El Nino event, but what is that going to mean, is speculation.”

The global cocoa surplus is expected to shrink to 111,000 metric tons in the ²⁰²⁶⁄₂₇ season from 325,000 tons a year earlier, financial services firm Hedgepoint Global Markets said last month.

That reflects an expected 2% decline in production and a roughly 2.5% increase in cocoa bean processing.

ALTERNATIVE SOUTH AMERICAN SUPPLIERS

Rising production in Ecuador and Brazil is diversifying global cocoa supplies, O’Brien said.

“I think you’ve had growth in a number of different origins, whether it is Ecuador or Brazil, which is now giving greater diversification of supply,” he said on the sidelines of an industry event organised by the Cocoa Association of Asia.

“The growth in Ecuador is very substantial. And their ambition is to be the second biggest cocoa producer in the world in the next two years.”

About half the world’s cocoa is produced in Ivory Coast and Ghana, the two largest bean growers. Ecuador ranks third globally.

O’Brien also said changes across the snacking industry, including adjustments to cocoa content and product sizes, mean a recovery in chocolate and snack demand may not translate into a matching rise in cocoa bean demand.

“Some of the structure across the snacking portfolio in the market made changes during 2024, 2025 to either cocoa content, sizing, and other things,” he said. “You still getting good snacking demand, but not necessarily the same amount of cocoa demand.”