The president’s intervention came after talks with the country’s cocoa regulator, Conseil du Café-Cacao (CCC), following strike threats by cocoa farmers in the week before Easter if the farmgate price for beans was not increased.
It means the price of cocoa for the May to August mid-crop is now set at 1,500 CFA francs per kilogram, an increase of 50% compared to the main harvest, which ended in March.
As reported by ConfectioneryNews, cocoa prices have more than tripled over the past 12 months because of disease and climate change affecting supplies in West Africa, where approximately 70% of the world’s cocoa is grown.
Living income
The official farmgate price that growers can charge for their beans in Cote d’Ivoire had not changed during this period, leaving many struggling to earn a living income.
A source told Reuters: "There were several proposals on the table, and as a last resort, the president wanted the highest possible price for the producers, so he decided 1,500 CFA per kg instead of 1,200 CFA, which had been validated previously.”
Industry watchers are expecting Cote d’Ivoire farmers to welcome the proposed increment but it is not yet clear whether neighbouring Ghana, the world’s second-largest producer after Cote d’Ivoire, will follow suit and raise its farmgate price for cocoa.
Demand exceeding supplies
Analyst Andrew Hecht, author of The Hecht Commodity Report, said adverse weather conditions in West Africa have pushed the cocoa market into a fundamental deficit, with demand exceeding available supplies.
“The latest rally and push above the $10,000 per ton level occurred as the Ivory Coast expects the mid-crop to decline this season. A recent Hightower report said, "The West African supply situation remains extremely tight going into the start of the mid-crop harvest next week, and that continues to underpin cocoa prices.
“Meanwhile, cocoa price dynamics could keep prices high for the foreseeable future. While Indonesia, Ecuador, and Brazil are cocoa-producing countries, the West African leaders could see output decline over the coming years.
“However, $10,000 per ton is a steep price that could lead the leading chocolate manufacturers and consumers to seek alternatives, using less chocolate and other ingredients.”
