Ivory Coast Raises Minimum Cocoa Price for Farmers by 3.4%

(Bloomberg) – Ivory Coast, the world’s largest producer of cocoa, will pay farmers 3.4 percent more for their beans in the main harvest of the 2013-14 season starting today.

The government will pay a minimum farm gate price of 750 CFA francs per kilogram (70 cents per pound), more than the 725 francs guaranteed last year for the main crop that runs from October to March, Bruno Kone, the government’s spokesman, told reporters today in Abidjan, the commercial capital.

“Taking into account expectations for main crop production this season and the current rate of inflation in Ivory Coast, the farmer is not going to be any better off than last year,” Jonathan Parkman, co-head of agriculture at London-based broker Marex Spectron Group, said by e-mail today.

While the price of cocoa has risen 17 percent in London since reaching a two-month low in June, the pace of increases for farmers has not kept up as most of the crop was sold in the first half of the year.

Farmers earned 1.017 trillion CFA francs from cocoa sales in the year that ended in September, Kone said. Cocoa production was 1.415 million metric tons in the 12 months through Sept. 30, he said. The production was similar to the previous year and the quality of the crop improved, he said. Grade 1 beans, the highest rate, accounted for 81 percent of production, more than the 64 percent in the previous year, he said.

Cocoa for December delivery was unchanged at $2,634 a ton at 11:04 a.m. on ICE Futures U.S. in New York.