Cocoa prices likely to remain high

THE El Niño phenomenon is disrupting agricultural production including cocoa in West Africa which accounts for nearly 70 percent of global production. Dry winds called the Harmattan are blamed for the lower output in the region.

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Meanwhile drought brought about by El Niño also shrunk Indonesia’s output in 2015 to 320,000 metric tons, and this year, strong rains from La Niña may threaten production again. As it is the local cocoa industry is already struggling with issues related to old trees being susceptible to disease, according to the Indonesian Cocoa Association as reported by the Jakarta Globe. The association expects output for 2016 to be within the same level as of last year.

Low production will continue to push cocoa prices up. As of 3 March 2016, the price per metric tonne of cocoa beans was at USD3,010.75 according to the International Cocoa Organization.