Ivory Coast Raises Cocoa Farmers' Pay After Price Recovery
(Bloomberg) -- Ivory Coast, the world’s biggest cocoa producer, raised farmers’ pay for the new season for the first time in two years after a recovery in global prices.
The West African nation increased the so-called farmgate price to 750 CFA francs ($1.34) per kilogram for the bigger of the two annual harvests that begins on Monday, Lambert Kouassi Konan, president of cocoa regulator Le Conseil du Cafe-Cacao, told reporters in the commercial capital, Abidjan. Minimum pay was 700 francs per kilogram for the last main crop.
Cocoa prices, which have swung dramatically in recent years, are on pace for the first rise in three. Ivory Coast’s pay increase will also narrow a price difference with neighboring Ghana after the neighbors committed to work together to market beans in order derive better benefits from the chocolate-making value chain.
Ghana kept its price unchanged and will pay farmers 475 cedis ($95.60) per 64 kilogram bag, or the equivalent of 7,600 cedis per ton, for the third straight season, Agriculture Minister Owusu Afriyie Akoto told reporters in the capital, Accra. At a per kilogram rate, Ghana’s price is $1.53.
“We were prudent with the price,” said Ivory Coast’s Konan. “The sector is still in a crisis.”
Last year, Ivory Coast slashed its producer pay by 36 percent after forecasts of bumper crops in West Africa prompted a collapse of almost a third in prices during the 2016-17 harvest. Together with Ghana, the neighbors account for about 60 percent of global cocoa production.
The two countries are targeting similar producer pay and want to set a joint floor price for future cocoa sales, said CCC Managing Director Yves Brahima Kone.
“Our objective is to coordinate sales by the end of January,” he said. “We are working toward that date.”
Ivory Coast’s CCC also made the following announcements for the new season:
- Crop size seen at slightly under 2 million tons
- Country to reinstate cocoa registration tax for exporters at 1.5% of free-on-board value
- Plant entry price set at 845 francs per kilogram
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