The cocoa embargo initiated by Ivoirian farmers (see my earlier post) has come to an end. The action itself probably did not push traders and exporters to pay farmers the suggested minimum farm gate price, but the action has certainly slowed down the delivery of cocoa to Ivoirian ports.
Reuters reports that between Oct. 1–the official beginning of the new cocoa year–and Nov. 23, total arrivals at the ports amounted to 201,000 tonnes, almost half of the 398,038 tonnes delivered during the same period last year.
It is not clear if the farmer action was the sole cause for this decline or if inclement weather (too much rain) and the spread of black pod disease played a more important role. Yesterday, the head of the Ivorian Cocoa Management Committee, Gilbert Ano N’Guessanm indicated that the total harvest for this cocoa year will be lower than last year’s harvest. “We think we will have around 1 million tonnes. Perhaps it will be a little more, but we are hoping for at least 1 million tonnes.”
Traders and exports still maintain that the new minimum price guidelines of CFA700/kg ($1.35) recommended by the Committee is unrealistic, but prices paid to farmers have crept up and hover higher than previous minimum of CFA500/kg ($0.98). Planter Koffi Kouame, whose farm is near Soubre, said: “The fear of exporters that they won’t have enough beans until the end of the year is helping a lot in pushing prices higher,”
During the week of Nov. 17-23, farm gate prices reported by various parties hovered between CFA520 and 575 per kilo ($1.02 and $1.12). The price paid at the port of San Pedro reached CFA625/kg ($1.22).
The increase in prices paid to farmers has also decreased the smuggling of cocoa to Ghana according to Reuters. “Everything depends on the price in Abidjan because if there’s at least 75 or 100 francs difference between the two, cocoa goes sometimes to Ghana, sometimes to Ivory Coast, that’s how it works here,” said Firmin Kouaho, who works in the cocoa transport business in Aprompron, a village close to the Ghanaian border. “The price is the most important thing.”
The fluidity of the border works both ways. Only last year, Ghanian farmers smuggled cocoa to the Côte d’Ivoire in response to higher prices there. That’s not an option for all farmers, but for those living close enough to the border, the access to alternative markets is a welcome choice.
Since the beginning of November, the weather and the quality of beans delivered has improved. But the pessimistic assessment of N’Guessanm will probably stop the decline of international cocoa prices.