Ivory Coast Cocoa Prices Rise as Exports Resume Post-Conflict, Growers Say

Prices offered to cocoa farmers in Ivory Coast are rising to levels approaching those seen before the West African nation’s civil war as shipments from the world’s biggest producer resume.

Farmgate prices plummeted from an average 800 CFA-francs ($1.74) a kilogram (2.2 pounds) in February after Alassane Ouattara, now president, imposed an export ban that paralyzed shipments and almost halted cocoa purchases in the interior.

Ivory Coast’s presidency was disputed for almost five months as supporters of Ouattara clashed with backers of Laurent Gbagbo, who had refused to step down after an election on Nov. 28. Ouattara, whose cocoa exports ban was intended to cut off funding for his rival, has taken office, while Gbagbo was captured in April. Companies including Armajaro Trading Ltd. and Barry Callebaut AG (BARN) said they resumed shipments from the country this month.

“We are happy because we are currently loading our second 35-ton truck since the crisis ended and we are getting a really good price: 700 CFA-francs per kilogram,” Willy Lambin, head of a farmers’ cooperative in the cocoa-producing town of N’Douci, said in an interview yesterday.

Cocoa prices will recover starting in the third quarter as West African production falls, Macquarie Group Ltd. said in a report yesterday. Consumption will outpace supply by 10,000 metric tons in the season starting in October, shifting from a 102,000-ton surplus in the current period, said Macquarie, which raised estimates for average prices in the third and fourth quarters.

32-Year High

Cocoa futures, which reached a 32-year high on March 4, fell as much as 1.5 percent today to $2,935 a ton, the lowest price since April 1, and were at $2,939 at 9:12 a.m. on ICE Futures U.S. in New York.

Cocoa will average $3,150 a ton in the third quarter on ICE and $3,350 in the fourth quarter, Macquarie said.

Lambin said the farmers in his cooperative had stopped selling beans for three months due to low prices offered by buyers, cash flow problems and security concerns triggered by the violence that accompanied the political standoff.

Farmers said buyers are now offering between 500 and 700 CFA-francs per kilogram, compared to 300 CFA-francs last month when banks remained closed and warehouses were full of beans.

“The mid-crop is picking up and I see a lot of cocoa trucks driving by,” Lambert Kouamé, who owns a cocoa farm 100 kilometers (60 miles) north of the commercial capital, Abidjan, said in an interview yesterday. “I’m selling at 525 CFA-francs per kilogram.”

Earlier this month, fighting erupted along the fertile western shore of the country as militias and Liberian mercenaries loyal to Gbagbo retreated towards neighboring Liberia.

“We are still scared when we go to our plantations, but fortunately prices are climbing -- we can get between 500 and 650 CFA-francs depending on the quality of the beans,” Eugene Alloco, head of a farmers’ cooperative in the town of Meagui, said by phone today.

(Source: http://www.bloomberg.com/news/2011-05-20/ivory-coast-cocoa-prices-rise-as-exports-resume-post-conflict-growers-say.html)