Ivorian cocoa prices

New cocoa season, same problems. Only this time it’s worse than ever. A quick recap on the Ivorian cocoa price problem. For at least 11 years, the cocoa market in the world’s biggest cocoa grower, has been liberalised, meaning the cocoa price given to farmers on their farm floats in line with the world market or the whims of the private buyers. To give farmers a helping hand though, the government/cocoa management board gives a ‘guide price’ to help orientate the farm gate price haggling. On October 3, the cocoa board announced a guide price 1000 cfa francs/kilo.

Problem 1

The price is totally unrealistic. Ghana, no. 2 producer, has a fixed price, with a sophisticated and stable support system to guarrantee the price. It’s offered 3280 cedis a ton, or the equivalent of 946 CFA francs/kilo. So, if Ghana can’t give a 1000 cfa fixed price, Ivory Coast certainly can’t.

Problem 2

The price is called in French, a ‘prix indicatif’. The equivalent in English would be the  ‘indicative price’, and if you don’t quite understand what such an academic term means, you’re not alone. I’ve never come across a farmer who understands the word ‘indicatif’. Clearly, if the farmers don’t understand the term, there’s a communication problem. Increasingly I think this is deliberate – who knows we might even see headlines in the papers this week saying that Ivory Coast has given a better cocoa price than Ghana, even though it’s like comparing bananas and oranges. I use the word ‘guide price’ because I believe it conveys a clearer sense of what we’re actually talking about.

Problem 3

The farmers aren’t selling their cocoa. They tend to do this every year at the start of the season because they hear the government price and then they meet buyers who aren’t prepared to offer the same price. From there, the farmers can only reach one of two conclusions: the buyers are cheating them or the government is lying to them. With a new government comes into power, the hope is always things have changed (especially with talk of cocoa reform). If the situation isn’t solved in the next ten days, farmers say they’ll march on the main cocoa building in Abidjan.

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