Cocoa buyers have been storing large quantities of cocoa beans in the bush for the past six weeks as they wait for a higher farmgate price, a move exporters worry will damage bean quality, exporters and buyers said on Thursday.
The new farmgate price will kick in on 1 October, the start of the 2019/20 season, and is expected to rise from 750 to 825 CFA francs ($1.30 to $1.40) per kilogram according to sources at Ivory Coast's Coffee and Cocoa Council.
It's normal for cocoa buyers to stockpile some August and September production if they expect to make a big profit from a substantial increase in the farmgate price.
But this year, the volumes of 90,000 to 100,000 tonnes are higher than usual. Last year, only 40,000 to 50,000 tonnes of beans had been stored in the bush by the same buyers.
"I have nearly 80 tonnes which is equivalent to a week of delivery but I do not want to sell," said a buyer in Soubre who asked not to be identified. "I will wait for the new price ... so it will make me some money."
Stockpiling
Several other middlemen across Ivory Coast cocoa regions said they were also stockpiling beans.
Exporters fear the stockpiled beans could be of lower quality. The situation also means exporters will have to deal with unusually large arrival volumes at port starting on 1 October.
"We are finding that our suppliers are holding large stocks currently, waiting for a farmgate price increase," said the commercial director of an international export company in Abidjan.
"This penalises us because we have received very few beans since mid-August."
The new farmgate price will be officially announced next Monday. Its expected increase is the result of strong sales during the 2018/19 season.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
