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Pierre Andurand

lines on the record: 39
first: 2024-05-16
most recent: 2024-05-16
sittings or episodes: 1
sources: podcast

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“In terms of the elections, you're asking Trump versus Biden, does he change anything for oil? I mean, I think it's quite marginal or nothing, I would say, for US supply because despite all the talks, US production surged under Biden. So I don't think that Trump would make it surge more. I mean, it's just a question of geology and money actually more than anything. I think we can't be too far from peak in US production. I don't think the US supply grows as a potential of many millions of barrels a day extra. So I think it's quite marginal for US production. But where there could be a bit of an impact for oil would be, I would expect Trump to end for the sanctions on Iran more tightly. So we might lose some oil from Iran under Trump. But again, that we probably get a bit more oil from the Saudis. So I'm not sure. I don't think Trump versus”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, at the end of the day, if there's no help from the US, they would attack the old facilities in Russia. But the fact that they're dependent on US weapons, obviously they have to. To listen to what the US say. I mean, as far as they're helping, if the US stop helping, then of course they will go for the whole facilities, I think.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Ports and the pipelines bringing crudele to the port and keep on blowing up pipelines. And then that would really have a big impact in the revenue that Russia would get, but that would also have an impact on all prices. And the US don't want to have million in an election year. They don't want to have the Biden administration is very, very paranoid about having high gasoline prices before the election. So they're putting pressure on the Ukrainians to not attack, to not attack ports. But if we get into a situation where the Ukrainians become more desperate and need more help, then they might attack ports. So that's where we could potentially have supply disruptions. In terms of”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“The conflict stays between Israel and Gaza. I mean, there's no oil, it has no impact at all on oil supply. So where we could have supply disruptions is coming from the Ukrainian attacks on Russian oil infrastructure. And when you look at what they've been doing for the last six months, they have mainly attacked Russian refine with. And that's really to try to hurt the war effort in Russia in a sense, not actually so much financially. It's more for them to not have the white amount of fuel to make enough rockets and all that and for the Russian people to feel like there's also something going on and it's not just in a faraway land. But the Ukrainians have not attacked pipelines and ports yet. I think if they really wanted to impact the revenues of Russia, they should attack.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Has been a bit lower than people expected, and that's the first time in a long time. Obviously, four months is not enough to grow a trend, but it's something to watch out for. I mean, is US shale production about to peak or not? We don't know. We'll only know it after the fact. But so far, it looks like US production is actually not growing too much. I mean, at least over the last four months. With the tensions in the Middle East in terms of what scenario we could have to really lose supply, I would say it's only if we get an attack on Iranian oil facilities, but I don't think the US would want that. So I don't think Israel would do it because if they were to do it, then the Iranians would probably try to blow up the Saudi facilities or close the Strait of Hormuz. And then we get into really huge supply disruption. But it's a low probability event, right? It's very unlikely, but it's not impossible.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so when you look at all the potential supply disruptions that we could have had, at the end, we didn't get any supply disruption. So if you look at in 2022-2023, we're all expecting to see at least some decline in Russian production due to sanctions or due to issues in Russia. And at the end, there was no supply response at all. I mean, there was no supply disruption. Last year in 2023, we got a surge in irradiance exports due to the fact that the sanctions on Iran were not really enforced, I would say. So we had relative to expectations. We ended up having a lot more Russian production and Iranian production. And also last year, US supply group grew up more than expected. Since the beginning of the month of the year, so for the last four months, four or five months, four months, I would say, US production has been disappointing.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“By the horizon, but does it mean that we go up from 10,000 to 15,000 this year and then 22,000 next year? I don't know. But I think that the kind of price move that I'm expecting, you know, like a decent multiple in price, not a 20% increase. A 20% increase doesn't change anything to your supply and demand balance on two to three or horizon.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“We are going to have a really large price increase sooner than later to slow demand. And I don't know how much it would have to go up by. Yeah, so basically on copper, what I mean that we are going to have to have a nonlinear move sooner than later because of the large deficit twinkling we're going to have this year and if not this year next year and we don't have enough inventories to meet that deficit so we need to slow down demand relatively fast and we think that demand is also very inelastic due to the fact that the price of copper as a percentage of the end product is very low and we need to go through the energy transition regardless of the price almost so i think that's why prices can move a lot for copper so at the end like we don't know exactly how high they can go do we go to i think they could go up four times so no other five years”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to get about like 400 to 500,000 tons deficit, and we had less than that in terms of visible stocks at the beginning of the year. So it means that we could actually run out of visible inventories by the end of the year. Now there is some extra inventories, mainly the strategic reserve, what we call the SRB in China. But if they know that we are at the beginning of a multi-year deficit, they're not going to sell their strategic reserves in the first year. So then we look at the following year. We think for next year we also have half a million tonne deficit. And actually, we can't cover that with the level of inventory. So we need, and then assuming we had enough inventories, we go to 2026 to invent deficits that are more than a million tons and eventually more than 3 million tons in 2030. And that obviously those deficits accumulate. And we don't have enough inventories to actually go through the first year. So it means that”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, it's going to be, I don't think it's just a price. It's like the whole path is important. I think. So we look at ETM by year. So we think, okay, at current prices, what would be the supply and demand balance? Do current prices have an impact on demand growth or not? Or what is the state of the global economy? What kind of demand growth do we expect for copper? And what is the supply growth? I mean, supply goals is not going to be too dependent on copper prices for the first few years. I mean, a little bit to scrap. You get a bit more scrap scrap metals when prices go up. So you can model for that. When prices go up, you get more scrap supply that comes as a source of supply for copper. And then the demand, we look at, okay, what can be price sensitive, what can be pushed too later or not. It's not that much, to be honest. And then we get to a path for the demand. And then we look at, okay, what do we think the supply and demand balance looks like every year? So for Apple this year at current price set, we think”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Obligated to go through that energy transition, then we should get a really, really large price move. So I think there's a long way to go for copper.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“It's like more than 10 years to bring 10 to 15 years to bring a new mind, and everything has been relatively well explored. So now the supply grows from copper is coming from more and more dangerous countries as well, like less and less stable countries. So you don't get that quick supply response in copper. But the demand is now and the demand is growing. I mean, we're not going to build that electric grid and we're going to build all these EVs and also that data center, they're going to be built at whatever the cost of copper. And remember that the price of copper is a very small percentage of the price of the end product, right? So if copper goes up 10 times, I mean, your end product will go up a little bit. It means it's not going to double in price. If you need to have a demand response mainly when the world is kind of”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Get like a million tons increase in demand against no increase in supply. So you get a larger and larger deficit every year. And the price hasn't reacted yet. And that's mainly because I think there's not enough funds out there or companies that actually create the futures market and hold positions for very long. I mean, if you look at most of the hedge funds out there, it's a bunch of like pods that have very many, many teams in those big multi-strategic funds that have very tight drawdowns. So they tend to try to trade for the next few days or next week or so. They can't really hold positions for very long. And there's not a lot of companies that can hold positions. So the market is not really doing its job to actually give a price signal to solve that deficit, that upcoming deficit that's a multi-year deficit. Basically, it takes to grow supply in copper. I mean, if you bring a new mine.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Or like fossil fuel generated electricity. So solar panels and windmills take a lot more copper. And also all the data centers take a lot of copper. So we have that surge in power demand that we need a lot of copper. And now we're getting into a market where despite the fact that the Chinese property market will be much weaker than the last 15 years in terms of growth and we're seeing decline in the property in the copper demand in China for the foreseeable future. Despite that, we see a market in which we are going to have overall one million tons of demand per year roughly increase per year. And the supply grows basically by the end of next year will be zero to negative. So we think that in terms of mining supply, we're peaking in about a year, like 12 to 18 months. And then we flatten and then we go down. So best case scenario.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“I think Copper should go up a lot. We are going from Over the last, let's say, 15, 20 years, we're in a market where demand was going about half a million ton a year and supply was growing half a million ton a year in average, right? If you look at long-term averages, it was over time a balanced market. We had times where it was tight, times where it was in a bit of a surplus, mainly during the pandemic or during financial crisis. But overall, it was a balanced market. Now, due to the energy transition, we're getting obviously as we have to electrify the world, we have new demand from electrification of transport. So it means that not only to make the electric vehicles, but also to supply more electricity overall in the world for that energy transition. So you have to work on the grid to have more renewables and renewable, take a lot more copper than like nuclear plants.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“On how the new crops are doing mainly in Ivory Coast and Ghana to have a good understanding of what the crop will be, the production will be the following year. So I feel like we have enough data to understand in which direction we're going versus the grains. I feel like the grains can they move up and down a lot and you can't, it's more complicated. You have to look at a lot of tiny details versus cocoa where you have many one mega major producer and another very large one.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“You have to follow the, I mean, Coco, I think, is less complicated than the grains because in the grain, your weather can impact production so quickly. But as for cocoa, it does impact production, but it takes five years to, you know, when you plant a cocoa tree for, I mean, three to five years for that cocoa tree to give you cocoa beans. This is for grants, you get it right away. So you get like a slower production response. So it should be when you have a big supply issue. and that you have issues due to climate change you should have like a larger move than than for grains so it should make make it easier in a way to have position that you can hold for longer that are a bit more structural than for grains i would say that's my understanding at least for now and there's enough data to i mean enough data meaning like a week we get like a bit more more data”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“I haven't followed orange juice. I mean, we looked at coffee quickly. It looked interesting as well because you get big losses in production from Vietnam. But we didn't see from far something that was so exciting. So we didn't try it. Orange juice, we have an upon loop. But I would say that generally the shift in weather patterns due to climate change are going to bring some structural stories in the soft commodities. And so we'll have to look at more and more of those soft commodities because it's not only going to be from one year to another. You're going to have that everything could change due to random change in weather. You have this underlying climate change that is also a trend that will impact production over time. And so we have to identify the communities that will be impacted by that.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“So basically, you have the exchange. So first you have exchange stock. So we have weekly data in European exchanges and the US exchanges. So in the US, for example, everything is held on exchange pretty much. So everything in exchange. In Europe, only 20% of the inventories on the European stocks are on exchange. The others are really with chocolate makers or that they need to hold stocks directly to make the chocolate. And then you have some also obviously at the producing region, and that's something that we can see the inventories at the port in Ivory Coast and Ghana. So the main exporters. You can actually follow the amount in inventory there. And then the West, what we don't know is inferred statistically, right? So there's a bit of noise in what...”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Or so next year. That brings us to a 13% stock to grinding ratio, which would be much lower than what we had in 1977. So we still have, I think, a high probability of having much, much higher cocoa prices. Even if they go there, we might have big drops like we've seen the last month or so, the last two weeks, but we might make new hides and then have big drops again and then make new highs. Or if over the next four months we realize that we are going to have from all the surveys we get every month in Ivory Coast and Ghana that the crop next year will be amazing, then the prices will probably come off from here towards, I don't know, five or six thousand dollars a ton. But they're not going to go back down right away to $2,500 a ton because we need very low inventory. So we need to rebuild stocks everywhere in the supply.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Be more upside. So it's still worth having some lens in terms of probability. But now, I mean, it could go down the probability that it goes back down is not zero. But for that, you need a lot of things need to go right. You need like a bumper crop in West Africa next year. And it means you need to have the perfect weather in West Africa from now to the end of the year in order to have a really good crop for next year. And it might happen, but it might not happen, right? You need to get extremely lucky for that to happen. So I think the balance of probabilities are still that we will have a deficit next year on top of the very large deficit this year. We believe we have 800,000 tons deficit out of 5 million ton market size, right? So it's a very large deficit. If we have the production going back up roughly 10% from this year to next year, we still have a deficit of 300,000 tons.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“You have to be careful about the sizing of your position because it's something that is clearly less liquid than the commodities I'm used to, which are, you know, for example, oil or natural gas. So it's a lot less liquid. And in a market like that, it's a lot more volatile, right? It's not always volatile, but when you have a large deficit and low inventories, it moves a lot. So you have to calibrate your position to be able to take a 50% move against you on the way, right? So that's what you have to do. It doesn't mean that you have to be out completely because I still think that there's more upside and downside. I think we still have the potential to go above $20,000 a ton later this year or next year versus on the downside, maybe we go from, if you look at a December contract, it's at roughly $7,000 a ton today. Maybe we go back down to $5,000. So you have like $2,000 a ton downside versus 13 to 15,000 dollars or maybe.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“We're going to have like a 10 lots position, right? So the market became more due to the fact that we had a massive move and we have a massive deficit. So everybody reducing their positions. And because of the increased volatility, we have less activity and that's what makes the price more volatile as well.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Cocoa lands. I think it was around September last year in average or a bit earlier to 28,000 loss to 280,000 tons at the moment. So they sold more than 80% of their lands actually. And the people who've been buying the futures from the funds, it's producers because they're producing a lot less than they expected. So what has been happening in the cocoa market is that you had a reduction of what we call the open interest where both the longs reduced their lands and the shorts we use their shorts and then we get into a market where you have less liquidity because you have less exposure, you have less lungs and less shorts. And then the volatility increases. So in the past when people were comfortable being, let's say, having a 100 loss position, not because it moved more than 10 times more than in the”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Down to 13%. So I don't think it's actually possible. That's when you really have real shortage of cocoa beans. You can't get it. And that's when the price can really explode. And so understanding that, you have to slow down demand. And we know that demand can't really be slowed. So that's when you can have an explosion. And remember that this commodity futures, you need to have they're actually physically settled, right? So if somebody wants to take delivery, they have to converge with the price of the physical. If you have no physical, somebody wants to take delivery. The price can't go anywhere. So it's a dangerous commodity to short, right? If you have no physical against it. And actually, sometimes we read news that the funds have been pushing cocoa prices is actually completely untrue because the fonts have been selling since February. They actually went from a length of 175,000 lots. So that's 1.75 million tons of”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“The same in volume, which means that they've been destocking cocoa beans actually. And so we had like distalking everywhere at the end chocolate level, at the cocoa beans, at the cocoa butter and cocoa powder level. So we had this talking everywhere on the chain. And now we have the largest deficit ever on top of two previous years of deficit. And it looks like next year we will have a deficit. So we're in a situation where we might actually run out of inventories completely. I mean, this year we think we will end up with an inventory to grinding ratio, so inventory at the end of the season of 21%. For the last 10 years, we've been between 35 and 40%, roughly. At the previous peak in 1977, we were at 19%. And that's what drove us to 28,000 a ton of today's dollars. If we have another deficit next year, then we might go to...”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“That most people look at, it's actually the inventory to grinding the ratio. So it's a measure of inventory to demand, what we call grinding is basically industrial companies that take the cocoa beans and they want to make chocolate with it. So it's a process. And some of them make the end product chocolate directly. Some of them sell back the product to other chocolate makers. And so basically a typical grinder would take cocoa beans and make cocoa butter and powder with it. And the prices of both those elements also went up even more than cocoa beans, which means that actually we probably had some distocking everywhere on the chain. So it looks like demand when we look at the chocolate makers, the undemand for chocolate deer and go down at all. It looks to be flat on the year. Grindings look to be down 3.5% this year, despite the fact that the end demand”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“What makes the price is mainly the fact that in the past you would have a supply response if prices were going up. But if now you don't get the supply response or the supply response takes four or five years, then you need to have a demand response. And a lot of people look at prices in nominal terms. So you hear people saying, oh, we are at all time high prices in cocoa. But that's because they look at prices in nominal terms. Previous high in 1977 was $5,500 something dollars a ton of $197, which is equivalent to $28,000 a ton of today's dollar. So we are still very far from previous highs. And so you have to look at a bit more history and understand in the past how prices reacted to a shortage, how long it took to recover for that shortage to actually solve itself, and what's different today. So there's a ratio that we look at.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's mainly an understanding of how much prices have to move to balance the market. Sometimes people can trade that market for like 20 years. They've been used to a range of prices and they believe, okay, the top of the range is a high price for an apple. But they don't really ask themselves what makes that price, right? And sometimes taking a step back can help. I mean.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“We managed to get enough relevant data actually to understand what's happening. You have some consultants that are specialized and every month they have a team surveys of the main producing regions to understand and then they work on their forecast on how much they think production will grow. So actually you have some specialists. So actually we get enough data to understand how.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“In Ivory Coast, because actually the farmers are still getting relatively low prices and they're still struggling to make ends meet. So a lot of those supply issues are actually structural.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Discovered in 1936. It's transmitted by millibugs, but it decreases cocoa yields a lot. So basically a tree that has that swollen shoot disease loses 25% yield within the first year and 50% within two years and the tree dies within three to four years. And we've had like actually a spread of that disease over the last year. And then also we had less usage of fertilizers, mainly in Iberi Coast. due to high fertilizer prices and also shortages due to the Russian invasion of Ukraine. So everything is linked. So some of it might be solved if we get better weather. I mean, for next year, we should have La Ninia and not El Nino. So that should help at the margin, but we still have issues with climate change. We still have issues with black pot disease and swollen shoot disease. And there's no indication that we get more usage of fertilizers.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“And that's why most of the production is concentrated around a certain latitude. So 70% in West Africa. And then you have 21% in many Latin America and 5% in Asia and Oceania. So the main reasons why we lost a lot of production this year is number one weather. So some of it due to El Nino. We had basically period of time when it was too hot and period of time when we had way too much rain. Second is climate change. So climate change is every year shifting the weather patterns generally unfavorably for cocoa productions. Then you have two diseases. You have one called the black pot disease that comes from a fungus and it occurs mainly during the rainy season. It's spread by rain splash. So basically it can't grow when it's dry. And then you have a virus called the swollen shoot disease. It's not a new disease.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Chocolate lovers that increase in price in cocoa just corresponds to two to five dollars per month. So people are not going to eat less chocolate because of that. Production has gone down a lot this year. I mean, first I should give a little bit of background of why cocoa is so concentrated in West Africa. I mean, it's mainly because it requires very specific temperature, rainfall, and humidity conditions.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to say, I can personally But yeah, but let's say if you eat even one full tablet, right? So 125 grams a day, every single day for the whole year, which is quite a lot, right, of high content of real cocoa, because your milk and milk chocolate, you have like less than 10% cocoa in it. So the price can go up 10 times your tablet is only going to double in price. It's not going to react very much to the cocoa price. But if you take a high content, high chocolate content, like a tablet 125 grams, that means that you probably have maximum of 50 grams of cocoa beans equivalent in it. I mean, it's probably a lot less. Then you get to an expense of $14 per month at current prices, which is an increase of $10 per month relative to when we had a more normal price. So it means that demand for more reasonable”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Supply versus demand, but what has been capping the price between 2500 a ton and $3,000 a ton? It was not demand because demand is extremely inelastic. I mean, you can study that historically when you have a recession or not, when prices go up a lot or not. I mean, demand generally goes up. And that's because the amount of in dollar terms that people consume in cocoa is very small. I mean, I did a back of the envelope calculation the other day. I mean, at basically $10,000 a ton, even though it's four times the more recent historical prices out of a market of $5 million of demand per year, you know, you have like 8 billion people on the planet. So in average, it means that people consume 1.7 grams of cocoa per day, which at 10,000 dollars a ton represents 1.7 cents per day.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Since the start of the season, which is the 1st of October, are down 800,000 tons. And now we have what we call the meat crop that is starting, but that we present only 20% of the balance of the season for West Africa. And that's not going to be enough to really change the deficit that we have this year. So we have a deficit of 800,000 tons from those two countries. And then looking at all the other countries, we have, I think, some are slightly positive, some are slightly negative, but basically we get to a deficit of 800,000 tons this year. And so that's the first time we have such a decline in supply. And that's very hard to make it fit. So at first you eat into current inventories until you run out of inventories and then the price can go anywhere. So when we look at, okay, what makes the price of cocoa, right? It's always about supply.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Most analysts out there have it down 11%, but that's because they tend to be very conservative. They have a lot of clients and they don't want to worry the world, so they come with relatively conservative estimates, but really tracking the exports from the main exporters, mainly Ivory Coast and Ghana, that we present together about 60% of world's production, we see basically ivory cost exports down 30% year to date, I mean Cedan to date and Ghana down 41%. So just those two countries together.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, generally, my background is more in energy trading, but I've traded quite a bit of metals as well, a little bit of agricultural products. But I have one analyst who's very good and told me in January Pierre you should look at cocoa. So I'm like, okay, I don't know anything about it. Tell me about. And he gave me a really good presentation that was really interesting. So then we really digged in really deep together to really understand the fundamentals of the market. And basically we have a massive supply shortage this year. I mean, we see production down 17% relative to last year.”
2024-05-16 · Odd Lots · Pierre Andurand Says the World Could Run Out of Cocoa Inventories · IDENTIFIED FROM THE TRANSCRIPT · source