Côte d’Ivoire Increases Cocoa Farm Gate Price

The 2008/09 Ivorian cocoa season began five days late due to the reform efforts that are to weed out the corruption in the cocoa sector. The management committee that now runs the key cocoa sector institutions opened the season on Sunday and also set a new indicative farm gate price of CFA700 ($1.48) per kilogram for the next quarter, up from CFA500/kg during the past quarters.

The price increase is sure to be welcome by cocoa farmers, but it is doubtful they will actually receive more money. Unlike Ghana, where the farm gate price set by the COCOBOD is binding, the indicative price in the Côte d’Ivoire is merely a guideline and the traders that buy cocoa from farmers increase or decrease prices depending on world market conditions, quality of the beans and distance from the port of San Pedro.

Already, there are indications that the new price will not be paid. A director of an exporting company in San Pedro, quoted by the Guardian, stated that: “It is absurd to fix the farm-gate price at 700 CFA when
last Friday the price at the port was 610 CFA/kg. I think it is
unrealistic and unworkable.”

With world cocoa prices now $800 below the high reached in July, the hopes for higher farm gate prices will remain unfulfilled. Farmers will, of course, react in their own fashion. They will reduce the amount of effort put into their cocoa farms. Complaints about the quality of Ivorian beans have increased in recent months and there is no doubt that this trend will continue as prices remain low.

The head of the management committee, Gilbert Ano N’Guessan, is obviously worried and he encouraged farmers to focus on quality: “Dear friends, quality has a price, and you can obtain better prices by
delivering good quality cocoa, that is well-fermented, well dried and
well sorted cocoa.”

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