Ivory Coast's cocoa regulator, the Cocoa-Coffee Council (CCC), has halted sales of cocoa export contracts for the 2024/25 season due to concerns about low output, two CCC sources told Reuters.
The CCC has sold between 950,000 and 1 million metric tonnes in cocoa export contracts for the 2024/25 season so far, including about 350,000 tonnes to multinational companies and the rest to local exporters, the sources said.
Sales are not expected to resume before next year, they added.
Top Cocoa Producer
Ivory Coast is the world's top cocoa producer and has seen a roughly 35% drop in production so far in the 2023/24 season that started in October. World cocoa prices have risen to record highs due to supply shortages, which have mainly been attributed to bad weather conditions.
"We are a little worried about the causes of the drop in production and the size of this season's harvest, so we are trying to understand better before resuming sales. The question is, will this decline continue?" said a CCC official.
The CCC had difficulty selling 2024/25 export contracts in recent months, with cocoa buyers demanding it lower prices. It was able to sell around 600,000 to 650,000 tonnes to local exporters.
Last week it finally sold about 350,000 tonnes to multinational companies without lowering its country premium, said a CCC official who spoke on condition of anonymity.
'Drop In World Prices'
"The multinationals were hoping for a drop in world prices to buy the contracts but we all realise that the market will not go down. They preferred to cover themselves," said another CCC official.
Four exporters and three European analysts confirmed that multinationals had resumed purchases in Ivory Coast and said they believed that this was behind a drop in prices this week between Monday and Wednesday.
However, the CCC unexpectedly decided to stop sales of 2024/25 export contracts this week, citing uncertainty in production estimates given the small size of the current harvest.
"We are satisfied with the volumes already sold but we do not know the size of the harvest so we prefer to play it safe," said a source at the CCC.
