Ivory Coast, the world’s top cocoa producer, has sparked controversy among exporters after scrapping a quality discount for cocoa beans from the upcoming mid-crop season.
According to a May 24th letter from the Coffee and Cocoa Council (CCC), exporters will no longer receive the usual 60 CFA francs ($0.10) per kg discount for lower-grade beans harvested during the mid-crop.
This discount typically compensates exporters for the additional work required to process smaller, more acidic beans produced during this period.
Exporters estimate the move translates to a combined loss of 9 billion CFA francs ($15 million) for companies with deferred contracts, which total around 150,000 metric tons according to the Ivory Coast cocoa exporters’ association GEPEX.
“This is a dry loss,” lamented the director of an Abidjan-based export company, speaking anonymously. “It’s unacceptable, especially considering the current situation.”
The decision comes amidst a global cocoa deficit caused by poor harvests in Ivory Coast and Ghana, the leading cocoa producers responsible for nearly 60% of the world’s supply.
Disease and unfavorable weather conditions are blamed for the low yields.
“This is a unilateral decision by the CCC,” another Abidjan-based exporter commented. “Small companies like ours rely on every franc, and this represents a huge loss of earnings.”
Exporters emphasize that they are still obligated to pay the fixed farmgate price of 1,500 CFA francs per kg to growers regardless of bean quality.
Combined with the lack of a discount for lower-grade mid-crop beans, their profit margins are significantly squeezed.
The situation is further complicated by the unusually small and acidic nature of the mid-crop beans due to the poor growing conditions.
While the main crop season typically yields beans graded between 90 and 105 per 100 grams, the mid-crop sees a wider range of 106 to 150 beans per 100 grams.
The CCC has set a limit of 120 for export, but this year’s harvest is exceeding that limit.
Adding to the challenge, an exporter based in San Pedro reported an acidity level of 1.75% for the current mid-crop beans, significantly exceeding the acceptable maximum of 0.75%.
