Cocoa farmers and merchants in Ivory Coast say they plan to stockpile much of the remainder of the 2014/2015 crop, aiming to profit from an expected rise in the official price when the new season starts in October. The harvest in the world's top cocoa producer is winding down, with output expected to total around 1.75 million tonnes by the end of September, on a par with last year's record high.
However, withholding beans risks distorting final production figures, as cocoa isn't registered until it arrives at ports, and could lower overall bean quality at the start of next season. The official farmgate price is currently set at 850 CFA francs ($1.49) per kg but the government is likely to raise the price to 1,000 CFA francs per kg in October, finance ministry sources told Reuters.
Ivory Coast sets the farmgate price based on an average of the price received during forward sales. The price for farmers has risen every season since the government began using the system during the 2012/13 harvest. Cocoa has bucked a slump in the prices of some other major commodities. At the end of last season, the anticipation of a rise in the farmer price led to the stocking of more than 100,000 tonnes of cocoa. But with poorer growing conditions and less cocoa left in the bush, stockpiling is expected to be significantly lower this year.
"I am going to sell a few sacks to pay my expenses and then I am going to keep the rest so I get the new price of 1,000 francs," said Sory Bourahima, who farms 16 hectares of cocoa in Blolequin, in the western cocoa belt. "If the price rises to 1,000 francs that will help us, because we have a lot of problems," said Bourahima, who has three children. Ivory Coast's marketing board, the Coffee and Cocoa Council (CCC), announced plans last year to seize all undeclared cocoa stocks at the end of the season to clamp down on warehousing that risks causing shortages at the ports. It outlined sanctions including fines and the withdrawal of trading licenses.
However, exporters said the CCC lacks the capacity to monitor warehouses located in the interior of the West African country and the measure had little impact. Climate conditions at the end of the current season also mean there will be fewer beans available to stock than in previous years as there was a lack of cocoa in the bush. "Weekly arrivals are below 15,000 tonnes and we are expecting that to fall further to around 10,000 tonnes in September," said one Abidjan-based exporter.
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