Ivory Coast has achieved robust sales of cocoa bean export contracts for the upcoming season, with 1.64 million-1.66 million tonnes sold by the end of August, sources at the Coffee and Cocoa Council (CCC) regulator and exporters said on Tuesday.
Contract sales reached 1.46 million tonnes for the main crop and 180,000-200,000 tonnes for the intermediate crop, the sources.
Ivory Coast and Ghana, which together produce about two-thirds of the world’s cocoa, introduced a $400 per tonne premium last season, known as the living income differential (LID), to increase wages for farmers, many of whom live in poverty.
“We sold well towards the end, even though it was difficult at the beginning because of some LID-related reluctance. We are satisfied and now looking forward to the start of the season,” a CCC source told Reuters.
A second CCC source confirmed export contract sales volumes, and said cocoa production for the main crop was expected to slip due to slightly unfavourable weather conditions and diseases that impaired crop development.
Cocoa pod counters and exporters shared the CCC’s analysis and forecast a dip in production, especially for the beginning of the season, between October and December.
“It’s not a catastrophe but just a slight drop of 10%, particularly during the first part of the harvest, but we don’t know if it will persist in the second half of the harvest (January-March),” said the director of an international export company based in Abidjan.
“Everything will depend on the weather,” the director said.
Eight exporters told Reuters they expected production of the main crop to fall 6-8%.
Two other CCC sources said the guaranteed farmgate price to cocoa farmers for the 2021/22 main crop should be 825-850 CFA francs ($1.51-$1.55), down 15%-17% from last season’s price of 1,000 CFA francs, which was not respected by intermediaries.
“The average sale has not been extraordinary because of the drop in the differential. Despite the LID, which is around 220 CFA francs per kilogramme, we think that the guaranteed price will be between 825 and 850 CFA francs,” said one source at the CCC.
“We may have a lower price than Ghana but the most important thing for us is to set a price that will be respected by all,” said another source at the CCC.
Prices in Ghana and Ivory coast will be similar in practice, as the rate of inflation in Ghana contributes to a de facto devaluation of the guaranteed price, according to exporters and analysts.
Source: Reuters (Reporting by Ange Aboa; Editing by Hereward Holland and Edmund Blair)