By Monica Mark Bloomberg -- Cocoa production in Ivory Coast, the world’s biggest producer of the chocolate ingredient, may decline by as much as 15 percent next season, according to two industry officials with access to confidential government data. Output may drop to 1 million metric tons in the season that begins on Oct. 1 and ends on Sept. 30, 2010, compared with an estimated 1.18 million tons in the current season that ends tomorrow, according to one industry official. Production probably won’t exceed 1.1 million tons, said an exporter who also has access to the statistics. Both officials declined to be named because they aren’t authorized to speak to the media. The International Cocoa Organization forecast world demand for cocoa beans will exceed output by 73,000 tons this year. A shortfall next year will make it four years in a row, the longest deficit run since 1969. Reduced supplies may push cocoa futures prices in New York to an average of $3,300 a ton, the highest since 1980, during the second half of 2010, London-based Barclays Plc said in an e-mailed report last month. Global inventories in the year ending this month will fall to the lowest level since 2003, sending the ratio of stockpiles to usage to 39.7 percent, the lowest since 1986, according to the ICCO. Cocoa output in Ivory Coast, which accounts for 40 percent of global production, is being hampered by a lack of investment by impoverished farmers and delayed government programs to distribute pesticides, according to shippers. Diseases including Black Pod Rot and ageing trees are also curtailing output, said Ali Lakiss, another exporter. Quality “I’m pretty sure the crop for the 2009-10 season won’t be any higher than 1.1 million tons,” Lakiss, director of Saf- Cacao, Ivory Coast’s largest domestically owned exporter, said by phone from San Pedro in western Ivory Coast. “And many of those beans simply won’t be of commercial standard because the fields haven’t been treated.” Farmers in Daloa, Ivory Coast’s most important cocoa growing region with production of about 300,000 tons a year, said delays to the government’s free pesticide program meant the benefits of spraying would now be reduced. Black Pod, a fungus that causes cocoa pods to turn black and rot, can reduce yields if not treated. “We were supposed to receive the pesticides by August free from the government, but it’s being sold on the open market,” Sassandra-based farmer Jean-Claude Coffie said in an interview on Sept. 25. “People are making a fast buck from selling it.” Pesticides During the current season Ivory Coast’s state-owned Fund for Developing and Promoting Coffee and Cocoa Activities treated 200,000 hectares (494,211 acres) of land with chemicals that combat black pod. Next season, the fund plans to use general pesticides to treat a total of 500,000 hectares, of which 312,000 hectares will be sprayed with chemicals that tackle black pod. Most of the country’s 2.2 million hectares will have to be treated at farmers’ expense or left untreated, Coffie said. Ivory Coast has come under pressure from the World Bank and the International Monetary Fund to reorganize its cocoa industry. The Washington-based lenders have urged the country to reduce taxes by about 50 percent over the next two years. The taxes weigh on farm-gate prices that exporters pay growers, reducing their earnings to around 37 percent of the free-on- board price, according to the World Bank. Producers in neighboring Ghana, the world’s second-biggest cocoa grower, get 70 percent of the free-on-board price paid by the importer and annual output has grown to around 700,000 tons from 500,000 tons three years ago, according to the Ghana Cocoa Board. Low farm-gate prices crimp productivity as growers have less money to invest in maintaining plantations. Debt Relief Under debt-relief terms set by the World Bank, Ivory Coast has reduced two of the eight main export taxes on cocoa and coffee for the coming season. One tax, known as the droit unique de sortie, will be cut by 20 CFA francs (4 U.S. cents) per kilogram (2.2 pounds) to 200 CFA francs from 2010. Ivory Coast has been able to rely on higher world cocoa prices to raise farm-gate prices to compensate for the high levels of domestic taxation. Cocoa futures for December delivery rose $2, or 0.1 percent, to $3,085 a ton on ICE Futures U.S. in New York yesterday. The price has gained 16 percent this year. Source: Bloomberg To contact the reporters on this story: Monica Mark in Abidjan via Johannesburg at pmrichardson@bloomberg.net.