Ivoirien cocoa farmers get pay cut as oversupply weigh on prices

Côte d’Ivoire, the world’s biggest cocoa producer, cut farmers’ pay for the new main season by more than a third as forecasts for a second annual global oversupply weigh on prices.

Farmers will receive a guaranteed price of 700 CFA francs ($1.23) a kilogramme for the larger of the two annual harvests that starts this October, compared with 1,100 CFA francs a year ago, Lambert Kouassi Konan, chairman of cocoa regulator, Le Conseil du Cafe-Cacao, told reporters.

The price is the same as what producers got paid for the smaller harvest during the six months through September and is the lowest for the main crop since 2012, when the nation reformed the sector to secure better compensation for farmers.

The pay would’ve been even lower if President Alassane Ouattara hadn’t agreed to suspend registration taxes for exporters to support prices, Konan said.

Cocoa futures slumped by more than 40 percent in the 12 months through April and have struggled to recover since, partly because bumper crops in both Ivory Coast and neighbouring Ghana, the No. 2 producer, bolstered expectations for a global surplus of the beans. World supplies may exceed demand by 97,500 metric tonnes in the 2017-18 season, according to the median estimate in a Bloomberg survey of 10 traders, analysts, brokers and grinders last month.