Top cocoa producers Ivory Coast and Ghana will keep farmgate prices unchanged for their respective mid-crop and light crop harvests despite current record global price levels, sources within their marketing bodies told Reuters.
Poor main crops in both West African nations are expected to lead to a global supply deficit of 375,000 tonnes this season. London cocoa futures have roughly doubled since the start of last year, while New York prices are up about 90% during the same period.
Ivory Coast and Ghana, which are currently bringing in their main crop beans, sometimes adjust the price buyers must pay farmers for their smaller second harvests.
Two sources at Ivory Coast's Coffee and Cocoa Council (CCC), however, said the price levels at which the bulk of this season's beans were sold forward last year, meant that a farmgate increase was not possible for the April-to-September mid-crop.
"The CCC has considered several options to make farmers benefit from the global rise in prices ... but it is not possible," said one source, who asked not to be named as he was not authorised to speak publicly.
Farmgate Price
The world's top cocoa producer in September raised the farmgate price to 1,000 CFA francs ($1.67) per kilogram for the October-to-March main crop of the 2023/24 season, from 900 CFA francs during the previous season.
Despite expressing concerns it is losing a portion of its crop to smugglers offering farmers higher prices, Ghana's Cocobod said it also ruled out farmgate price increase for the upcoming July-to-September light crop.
"That's not on the table," Fiifi Boafo, the marketing body's head of public affairs said.
"Cocobod signed contracts based on the producer price in the market now, so we cannot adjust the price midway. That will only add debt to Cocobod," he added.
Mid-crop and light crop beans are usually smaller and of lower quality than main crop cocoa.
Representing around 30% of Ivory Coast's cocoa production and a smaller share of Ghana's crop, these second harvest beans are mainly sold to local processing firms.
Crop Outlook
Ivory Coast's mid-crop output is expected to come in between 450,000 and 500,000 tonnes this season, compared to around 555,000 tonnes during the last two seasons, a second CCC source said.
Pod counters, exporters and CCC sources have raised concerns about the impact of poor weather on the quality of the upcoming mid-crop.
"Everyone is worried about bean size," one exporter said. "But in the current context, all beans are gold dust."
