ABIDJAN, Feb 25 – Ivory Coast could accumulate about 200,000 metric tons of unsold cocoa by the end of March if regulated farmer prices remain unchanged, industry experts and global trading executives said.
The country and neighboring Ghana produce about 50% of the world’s cocoa supply. Over the past months, beans from the main crop have built up at inland warehouses and port facilities after traders slowed purchases.
The government set the farmgate price for the main harvest in October above current world market levels. Traders said the pricing gap created losses on purchases and led many international buyers to stop buying the main crop.
Global cocoa prices have also declined during the period. Prices have dropped roughly 50% this year and reached a near three year low earlier, according to market data referenced.
Local trade and government sources said Ivory Coast sold about 200,000 tons from its April to September mid-crop to international buyers last week. The mid-crop is generally cheaper and is mostly processed locally because it is considered lower quality.
In late January, the government pledged to buy 100,000 tons of unsold beans at an estimated cost of about $500 million to provide payments to farmers. Trading executives said the total volume the state may need to purchase could be higher. They added that local traders have defaulted on at least 100,000 tons of main crop purchases.
Farmers are expected to harvest another 100,000 tons before the main season ends in March. The beans may remain unsold if prices do not change, the executives said.
The Coffee and Cocoa Council, the sector regulator, said market estimates of unsold stocks are inaccurate but did not provide figures. The agriculture minister said the government will announce a farmgate price for the upcoming mid-crop by the end of February.
Ghana recently cut its farmer price by almost one third after payment delays.
