Ivory Coast sets cocoa farmers' pay at 700 CFA francs per kilo

Ivory Coast, the world’s top cocoa grower, set its minimum rate for farmers at 700 CFA francs ($1.23 ) per kilogram for the 2017-18 crop,a steep drop over the previous year, due to falling global prices.

Lambert Kouassi Konan, chairman of the country’s cocoa regulator said the price is the same as what producers got paid for the smaller harvest during the six months through September and is the lowest for the main crop since 2012, when the nation reformed the sector to secure better compensation for farmers.

The minimum price guaranteed to farmers was 1,100 CFA franc per kilo at the start of the 2016-17 season.

Although production increased 28.5 percent to a record 2.15 million tonnes in the 2016-17 season, world cocoa prices have fallen by more than a third.

Cocoa prices slumped by more than 40 percent in the 12 months through April and have struggled to recover since, partly because bumper crops in both Ivory Coast and neighboring Ghana, the second largest producer.

“It is difficult. It is true that the price it is disappointing but I think that we must not be ungrateful towards the government of Ivory coast. For two years of our prices were significantly higher in those of our neighbors,” said Cisse Sidikiba, head of Ivory Coast’s National Cocoa Growers Association.

Prior to Sunday’s announcement, president Alassane Ouattara consulted with his Ghanaian counterpart, President Nana Akufo-Addo, to narrow the price gap between the two countries.

Ghana has choses to keep its prices unchanged at the equivalent of $1,725 a ton since October last year and is ruling out a cut for the new season, raising the likelihood of smuggling from its neighbour.

The cocoa industry accounts for 15 percent of Ivory Coast’s GDP and two thirds of jobs in the west African economy.