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Issue #583 | Forest Products

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Forest Products

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2014 Media Kit
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Ivory Coast cocoa prices driven higher by Asian, European demand

By: | at 11:50 AM | Channel(s): Breakbulk & Projects  

Strong demand from Europe and Asia is pushing up cocoa prices in top grower Ivory Coast and fuelling the smuggling of beans into the country from neighbouring Ghana, farmers and exporters said on Friday.

World cocoa prices have climbed steadily since the beginning of the year and hit a 33-month high on Thursday due to expectations of a jump in chocolate consumption and fears of a supply deficit.

Ivory Coast set a minimum farmer price of 750 CFA francs ($1.55) per kg at the beginning of the 2013/14 season in October. The minimum price at the ports was fixed at 830 CFA francs/kg with a ceiling of 845 CFA francs/kg.

“The market is very high and the exporters are looking for lots of cocoa,” the purchasing manager of a European cocoa exporter told Reuters. “Demand from Europe remains strong and now Asia is adding to that. Indonesia is asking us for lots of beans for example.

He said exporters were paying up to 850 CFA francs/kg at the port of Abidjan, breaking the price ceiling in order to ensure supplies of export-quality beans.

Ivory Coast is currently harvesting its April-to-September mid-crop, most of which is typically bought by companies with local processing facilities due to the generally smaller size of mid-crop beans.

However mid-crop quality has been good this season, exporters said.

“The grinders are the biggest buyers,” a bean exporter told Reuters. “But given the strong demand, we’re offering cooperatives high prices so they sort their cocoa to have big beans for export. Right now we’re getting good quality.”

He said he was paying between 840 and 850 CFA francs/kg directly to cooperatives able to transport their beans to the port of Abidjan themselves.

In the eastern region of Abengourou, cooperatives managers said merchants were increasingly paying above the government’s farmgate price for beans smuggled in from Ghana.

“The merchants are taking Ghanaian cocoa at between 760 and 780 CFA francs,” said cooperative manager N’Dri Kouao, who farms near the border town of Niable. “That’s pushing the Ghanaians to bring their cocoa, which is of very good quality.”

While the two West African neighbours set comparable farmer prices at the beginning of the season, Ghana’s currency has plunged around 28 percent since the start of the year, opening a significant gap in the two countries’ cocoa prices.

“Most of the farmers along the border come sell in Ivory Coast. The Ghanaians prefer CFA francs. And they say the price is better here,” said Joseph Amani, a farmer in the eastern region of Abengourou. ($1 = 484.2400 CFA francs) (Editing by Joe Bavier and David Evans)