Ivory Coast Doubles Cocoa Price to Boost Bean Production

Ivory Coast - In an effort to encourage farmers to produce more cocoa, the Ivorian government is now enacting a significant 50% rise in the farmgate price of cocoa beans. The National Minister of State for Agriculture, Rural Development, and Food Production, Kobenan Kouassi Adjoumani, made this announcement and stated that the price will increase from CFA Fr1,000 (US$1.64) per kilogram to CFA Fr1,500 (US$2.46).

This is anticipated to have a substantial impact on the market, particularly given that Ivory Coast is the world's top producer of cocoa, contributing 40% of the world's supply of cocoa beans.

With the words, "If the dynamic of the rise in world prices continues like this, we will still have very good news to announce to you," Adjoumani hinted to the prospect of more favorable events.

In his comments on this proposal, Gerard Stapleton, a global agribusiness analyst at GlobalData, a data analysis and consulting organization, totally supported the notion that producers' greater output of cocoa is about to be stimulated by this price raise.

Compared to the prior farmgate price level, it should ultimately motivate farmers to raise their output, he said. The recent incident takes place against the backdrop of skyrocketing cocoa prices, which have more than quadrupled in the last year as a result of ongoing supply issues.

Actually, this is the third deficit in a row, mostly caused by the occurrence of two deadly illnesses: the virus that causes cocoa swelling shoots and black pod disease.

In addition, elements like more rainfall—which is especially clear given that in July 2023, Côte d'Ivoire had twice as much precipitation as usual—have led to the spread of illnesses.

As the supply/demand gap narrows, increased supply should be negative for global pricing. But in the near run, it might not have much of an influence on the production of Ivorian farmers whose crop productivity is affected by illness, according to Stapleton.