Côte d’Ivoire economy: Reforms in the cocoa sector have mixed results
Reforms in the cocoa sector have protected the interests of farmers, but processors and exporters are uneasy about the new pricing regime. Côte d’Ivoire is the world’s largest producer of cocoa, typically accounting for around 40% of global supply, and the cocoa crop has a large impact on economic growth, export earnings and government revenue.
Côte d’Ivoire’s cocoa sector has undergone major reform during the 2012/13 season (October-September), which is drawing to a close. Higher prices have been welcomed by farmers, but Ivorian processors have been hurt by the reforms and may as a result scale back their plans to expand.
Under the management of the cocoa and coffee regulator, the Conseil du Café Cacao (CCC), the key change has been the introduction of a minimum reference price for cocoa, replacing the indicative price used in previous seasons, which was routinely flouted by local buyers at the farm gate. The overriding aim has been to ensure that farmers receive at least 60 70% of the international price throughout the season, and the decision to fix the price at CFAfr725/kg (US$1.45/kg) turned out to be sound. The new pricing system has been successfully enforced at the farm gate, with a number of traders who tried to undercut the price facing prosecution, and this has helped to reduce the volumes of beans smuggled into neighbouring Ghana in search of better prices.
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