The Minneapolis-based company said it was setting up a license-buying company to source beans directly from the Ghana Cocoa Board.
“Cargill expects to start its Ghanaian sourcing next season,” Harold Poelma, president of the company said in an interview with Bloomberg at the European Cocoa Association’s Forum in Dubrovnik, Croatia.
He said the Ghana Cocoa Board had been very positive “as well on us becoming a more active player on the ground”.
Mr. Poelma said buying cocoa directly from the board “allows us to get closer to the farmers to drive cocoa sustainability”.
Cargill Inc believes that cocoa crunch that curbed processing in the world’s largest producing nations will last until a surplus forecast for next season starts reaching the market.
Mr. Poelma said the dry weather that hurt crops in top-growing region in West Africa this season would also mean the peak of bean deliveries from the bigger of two annual harvests that starts next month would be delayed.
“Processors will find it hard to get hold of good-quality beans before a surplus of more than 200,000 metric tons hits the market next year,” he said.
A lack of beans and lower quality has limited grindings in producing countries and caused the price of cocoa butter, which accounts for about 20 per cent of the weight of a chocolate bar, to spike ahead of the peak demand period, when chocolate makers are preparing for Halloween and Christmas.
The cost of cocoa butter relative to bean futures, the so-called ratio, climbed 24 per cent this year, according to KnowledgeCharts, a unit of Commodities Risk Analysis.
“From a European perspective or from a North American perspective, the butter is needed now,” Mr. Poelma said. “If you don’t produce today in origin you will not be able to meet the demand which needs to be serviced in Europe and North America in the coming two months.”
Bean shortages this season are also causing tension on the futures markets, with the premium cocoa for December commands over the March contract rising more than 10 pounds ($13) a ton last week, ICE Futures Europe data showed.
“While the crunch will make it harder to deliver cocoa to the exchange when futures expire December 13, buyers’ appetites will be tempered by the prospect of next year’s surplus,” Mr. Poelma said.
“By the time you would take delivery of the cocoa on December, there will be sufficient new crop shipments coming into Europe,” he said. “The physical cocoa that’s on the terminal market has value in the fourth quarter.”