Ivoirien co­coa farm­ers get pay cut as over­sup­ply weigh on prices

Financial Nigeria Magazine - - Finance -

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.

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