Cocoa news just keeps getting worse. After a less than stellar production for the main season in Africa, several predictions claim that future output will also be lower than expected.
According to a report by BNP Paribas Fortis (now there’s a merger history in a name), a predicted El Niño weather pattern will reduce cocoa production in Ecuador and Indonesia for the next yea. Fortis claims that during El Niño years, cocoa production runs ten percent lower than normal. But the ICCO points out that Indonesia’s output declined only by 2.7 percent during the last El Niño occurrence.
In any case, Nigeria’a Cocoa Association downgraded their forecast for 2009-10 by ten percent because farmers there are using illegal or poor quality pesticides. The association claims that use of these pesticides will negatively affect the size and quality of the cocoa crop. Farmers resort to these alternatives because the price of approved pesticides has increased significantly. The knock-off pesticide, smuggled into Nigeria, costs less than half of the price for Ridomil, the approved pesticide.