Ivory Coast’s Farmers Plan Cocoa Investment as Prices Climb

(Bloomberg) – Cocoa farmers will put more money into the crop in Ivory Coast, the world’s largest grower, after the government raised the guaranteed minimum price for the beans by 13 percent, according to three heads of cooperatives.

The government last week set the minimum price at 850 CFA francs ($1.63) a kilogram (2.2 pounds) for the main harvest of the 2014-15 marketing year that started Oct. 1, up from last season’s 750 CFA francs. Cocoa futures rose 0.1 percent to 1,995 pounds ($3,186) a metric ton by the close in London on Oct. 3, extending the gain in the past 12 months to 16 percent.

“The new price is good,” Moussa Zoungrana, head of a growers’ cooperative in the central-western town of Duekoue, 460 kilometers (286 miles) from the commercial capital, Abidjan, said by phone on Oct. 2. “This will encourage farmers to buy more inputs and plant new trees.”

Two other heads of cooperatives, located in the western town of Meagui and in Abengourou, in the east, also said they expect farmers to buy more production aids, including insecticides, pesticides and fertilizers, and give better care to their plantations after the price increase.

Ivory Coast produced a record 1.74 million metric tons of cocoa in 2013-14 compared with 1.44 million tons a year earlier, the government said on Oct. 1. This was attributed to favorable weather conditions and because farmers have regained confidence and done more maintenance in their plantations following the changes introduced in the cocoa industry in 2011, it said.

Raise Further

Those amendments included the sale of as much as 80 percent of beans before the harvest starts and the introduction of a minimum guaranteed price.

The government should have raised the guaranteed minimum price even more to encourage farmers to switch from other crops such as rubber, said Mamert Kablan Angora, a grower in Niable near Ghana.

“Given the record production and international prices, we were expecting more,” Angora, who grows cocoa, coffee and rubber, said by phone on Oct. 2. “This price is likely to satisfy old farmers but it is not high enough to make young people interested in growing cocoa.”

Ivory Coast cocoa farmers harvest a main crop from October to March and a smaller mid-crop from April to September. Exports for the 2013-14 season rose to 1.65 million tons from 1.46 million tons a year earlier, government spokesman Bruno Kone said on Oct. 1.

Farmers who withheld production in recent weeks waiting for a higher price will now start selling, said Salam Pelaga, who heads a 1,200-member exporting cooperative in Soubre, in the country’s southwest.

“This price is a very good news,” he said.