The Ivorian cocoa market is currently under pressure as prices have risen spectacularly since the beginning of November. Operators find themselves worried, wondering if the supply of beans will be sufficient to meet growing demand. This dynamic, fueled by increased tension, highlights major issues for Ivory Coast, the world’s leading supplier of cocoa beans.
An uncertain harvest season
Market players hope that the current season will be better than the previous one, marked by a significant drop in the harvest, estimated at around a quarter of the usual production. However, uncertainty remains, and this concern is all the more palpable as world cocoa prices have increased dramatically. On Friday, January 3, a ton of cocoa for delivery in March traded at more than $11,081 on the New York Stock Exchange, a figure that fuels speculation on the future development of the market and reinforces uncertainty over harvest forecasts.
Leaks and illegal price increases at the border
The Ivorian cocoa market is facing a worrying phenomenon: a sharp increase in prices at the border with Guinea. While a kilo of beans is purchased at a fixed price of 1,800 FCFA from the producer, it is sold at prices of between 4,000 and 5,000 FCFA once across the border. Although these figures are not officially confirmed, there are rumors of 50,000 tonnes traded illegally in the last three months. This practice, although old, is taking on a new dimension, with the margins achieved being considerably increased due to the surge in prices.
An Ivorian exporter explained that this situation was “more worrying than last year”. He emphasizes that this fraud has a direct impact on the volumes available for purchase. Each kilo of cocoa that leaves the country without being counted in official channels reduces the quantity available to legal buyers, which fuels pressure on stocks and drives up prices.
The impact of intermediaries and premiums on prices
-Intermediaries also play a central role in this pressure on prices. If exporters are complaining, it is because they find themselves forced to adjust their premiums significantly. Indeed, instead of paying a premium of 100 FCFA per kilo to their intermediaries, they now have to pay premiums two or three times higher. This situation is all the more critical as cocoa production should naturally decrease in January and February, a period during which demand nevertheless remains high. In addition, climatic hazards complicate the situation and risk further increasing this pressure on stocks.
Challenges related to bank financing
Another significant difficulty encountered by Ivorian exporters and industrialists concerns the lack of support from local banks. In one year, cocoa prices paid to producers have practically doubled, but, according to a representative of a multinational operating on the Ivorian market, “no local bank has adjusted its financing according to this increase”. This lack of adaptation of bank financing puts exporters in a difficult position, because, due to lack of sufficient working capital, some are forced to turn to other sources of financing. This creates a major risk for them: that of seeing volumes of cocoa escape them due to the inability to finance the purchase in due time.
A tense situation but full of challenges for the future of the Ivorian market
The cocoa market in Ivory Coast is going through a period of turbulence, with prices skyrocketing and structural challenges threatening the balance of the sector. While exporters and producers must navigate price pressure, lack of financing and fraud practices, the situation calls for adjustments in public and banking policies to support the sector in a more stable manner. If Ivory Coast wants to continue to play a major role in the global cocoa market, it will be necessary to manage these tensions and adapt to an increasingly complex economic and climatic environment.
Moctar FICUU / VivAfrik
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