Under pressure from growers, eager to take advantage of the surge in cocoa prices on international markets, the Ivorian government announced on Tuesday, April 2, a record increase in the minimum price guaranteed to farmers. Plus 50% for the intermediate campaign, open from April to the end of September, thus increasing the kilo of beans from 1,000 to 1,500 CFA francs (1.52 euros to 2.30 euros). A week earlier, a ton of cocoa was trading at $10,000 (9,300 euros) on the New York Stock Exchange. A historic peak from which the producers of the world’s leading exporter – 40% of production – intend to benefit. Several of their unions had, on March 27, suspended a strike notice filed for the next day, after being promised imminent “courageous decisions ” of the government.
Expected by the main players in a sector which contributes to nearly 15% of Ivorian GDP, the Minister of Agriculture, Kobenan Kouassi Adjoumani, praised Tuesday “ a price level never before achieved in the history of the cocoa sector in Ivory Coast” and praised them “exceptional efforts” granted by the State.
If, in the memory of Ivorian farmers, such a high floor price had never been reached, three planters’ unions, meeting in the premises of the Coffee-Cocoa Council (CCC), have “taken note” of the increase in this “farm edge” floor price, purchased directly from the producer, but warn that their “final decision” will be known on April 12, after a consultation meeting planned in Daloa (central-west) with their regional delegates. Because if they appreciate the government’s gesture, their demands concerning “the re-examination” of the forward sales system have not been taken into account. In Côte d’Ivoire, 70% to 80% of the harvest is sold in advance to exporters through electronic auctions. The rest through “spot” sales, for cash, immediately after the harvest.
This request for reform was taken up by the deputies of the PDCI, the main opposition party, who are calling for an increase in the floor price to 2,500 CFA francs (3.81 euros) and “a review of the marketing policy for Ivorian agricultural products”.
Global warming
“We had to observe an increase in prices on the stock markets for many languages to begin to criticize the stabilized system in favor of the liberal system”replied Kobenan Kouassi Adjoumani, recalling that Ivory Coast had already experimented with a spot sales system between 2000 and 2011. “Insignificant amounts were paid to producers when world prices fell. Often, cocoa was paid for less than 500 CFA francs per kilo,” he argued while Ivorian farmers look with envy at their Cameroonian counterparts who are these days selling a kilo of cocoa for around 5,000 CFA francs.
Together with the director of the Coffee-Cocoa Council, Yves Brahima Koné, the Minister of Agriculture assured that the surge in world prices will benefit Ivorian producers with “a gap in time” since sales of the 2024-2025 harvest will be made on the basis of the price which will be in effect on 1er October 2024. Provided that the volumes harvested correspond to forecasts.
Because the torrential rainfall of recent years, which has added to the proliferation of the cocoa shoot edema virus, is reducing the quantity of beans harvested. For the 2023-2024 season, the expected volume of 1.75 million tonnes is a quarter lower than that of the previous campaign. A continuation of this drop in production, caused in particular by global warming and the aging of orchards, could fuel the rise in prices and relaunch the debate on the anticipated sales system.