Ivory Coast cocoa farmers hit by price dispute

Cocoa exporters and grinders in Ivory Coast are withholding financing from suppliers amid a dispute over the pricing of mid-crop beans threatening farmers’ incomes and deliveries to ports, industry sources said.

Farmers and trading houses predict a 24 percent fall in the harvest this year because of a lack of rain and harsh winds that have diminished the size and quality of beans in the world’s biggest cocoa producer.

Already this season, arrivals at Ivory Coast’s ports have been hit by the poor crop quality. Now, exporters say they will not finance merchants to buy more beans because the cost has not fallen with the drop in quality, which is likely to hit farmers hard this season.

The Coffee and Cocoa Council (CCC) has kept the minimum price it sets for farmers unchanged at 1,000 CFA francs ($1.71) per kilogram for the mid-crop harvest, which opened on April 1, a sum buyers say is too high.

“We asked for a discount because of the small beans. We said that the price is too high but no one listens,” said the director of one Abidjan-based grinder. “So we decided that we wouldn’t finance middlemen and we would buy nothing beyond 120 beans (per 100 grams).”

The industry uses bean count – the number of beans per 100g of cocoa – to measure the size of cocoa beans, with a higher bean count indicating smaller bean size.

The CCC does not allow cocoa with a bean count over 120 to be exported in bean form, so local processors typically buy the bulk of the smaller mid-crop beans, which are more acidic and yield less butter.

But while prices have remain unchanged from the main crop, grinders say bean counts currently range from around 130 to 140, forcing them to purchase larger volumes for the same result. With no discount on mid-crop beans, they say they have seen their margins slashed.

Recent rain in the main cocoa-growing regions was too late to affect the development of pods on the trees, farmers said, seeing no improvement before July or August.

“We’re not looking for quantity but for quality”, said one trader. “If it’s not possible to get 120, then we will wait.”

As a result, only 5,000 tonnes of beans arrived at Abidjan and San Pedro’s ports between Monday and Thursday compared with 22,000 tonnes over the whole of the same week last year.

According to exporters, the number of beans reaching ports could be halved from April to June versus last season, when 300,000 tonnes arrived.