Brazil Eyes More Ivorian Cocoa After Cargill Breaks Drought

(Bloomberg) -- Brazil is targeting more cocoa imports from top grower Ivory Coast after Cargill Inc. shipped the first batch since 2012.

The South American nation probably will bring in another 10,000 metric tons of Ivorian beans by the end of 2018 after inbound shipments of 15,000 tons earlier this year, according to Brazilian cocoa processors group AIPC. U.S. agribusiness firm Cargill received its first cargo in July, said Laerte Moraes, managing director of the cocoa unit in Brazil, without disclosing volumes.

Brazil halted Ivory Coast cocoa imports after bugs found in cargoes in 2012 fueled phytosanitary concerns. Reopening the market will bring relief to processors in Latin America’s biggest economy who turned to pricier beans from No. 2 grower Ghana to bridge a production shortfall.

“In recent years, the cocoa bean production in Brazil has not been sufficient to meet the growing demand of the local cocoa processing industry,’’ Moraes said. Import volume “depends on the size of the Brazilian cocoa crop,’’ he said.

Cocoa processors in Brazil are renegotiating contracts to secure Ivory Coast beans instead of the more expensive Ghanaian product, Eduardo Bastos, AIPC’s executive director, said by telephone Wednesday. Brazil’s production this year is estimated at 180,000 tons, about 50,000 tons short of the grinding demand, he said, adding that total imports probably would be 60,000 tons to secure some stockpiles.

Ivory Coast to Tap Brazil Cocoa Market for First Time Since 2012

The import forecast will depend on the Ivory Coast crop, which looks to be delayed, Bastos said. Trees in the West African nation still have few pods, but many flowers, he said following a recent field trip. There’s also concern about too much rain and disease, he said.

Importing cocoa from Ivory Coast instead of Ghana saves processors in Brazil about $100 a ton, according to AIPC. While the group expects a better domestic harvest of 200,000 tons next year, imports will still be needed to meet demand, Bastos said. Cargill said it aims to purchase from local farmers when possible.

Cocoa futures traded in London rebounded 13 percent this year after two consecutive annual declines on speculation lower prices paid to farmers in West Africa will cut the incentive to produce at a time of still strong demand.

©2018 Bloomberg L.P.