Ivory Coast: Cocoa growers call for review of price-fixing mechanism
In the span of a year and a half, the price of a ton of cocoa has doubled due to various factors. While this surge brings joy to growers in several countries, the same cannot be said for Ivory Coast.On Monday, March 18, 2024, the Ivorian Platform for Sustainable Cocoa (PICD) called for a revision of the price-fixing system to enable growers to benefit from the current rise in cocoa prices on the international market.
The organization believes that the current mechanism managed by the Coffee and Cocoa Council (CCC) deprives cocoa farmers of reaping the benefits offered by the international market, where cocoa prices have nearly tripled during the current year, reaching historic highs of $8.000 per tonne and £6.000 per ton respectively in New York and London.
In Ivory Coast, the regulator sells 80% of the annual harvest in advance based on current prices to set cocoa prices at the beginning of each main (October) and intermediate (April) campaign. Currently, the rate of 1.000 Fcfa set for the small harvest is the same as that established at the start of the main season last October.
« In several countries, cocoa producers directly benefit from world market prices. It is difficult to understand why Ivorian cocoa producers do not benefit from this », said PICD to the media. The observation is that the official rate is low compared to that in force in Cameroon, for example, which ranges between 3.000 and 4.000 Fcfa/kg.
Indeed, the price-fixing mechanism in Ivory Coast is such that, in the event of a drop in world prices, this mechanism reduces the vulnerability of producers by guaranteeing them a minimum of 50% of the CAF price, regardless of the level of weakness in world prices, a way to protect producers, which is not necessarily the case in other countries where prices are directly linked to world quotations.
