ABIDJAN: Ivory Coast, the world's top cocoa grower, has topped up a reserve fund to protect against world price fluctuations to 40 billion CFA francs ($83.33 million), a government document showed. The West African nation abandoned a decade of sector liberalisation last season and now sells forward the bulk of its anticipated harvest in order to guarantee a minimum price for growers as part of efforts to improve their incomes.
The fund reached 56 billion CFA last year, but the government used some of the money to prop up last season's April-to-September mid-crop price for farmers.
"The reserve fund was recharged by the government up to a level of 40 billion CFA as planned," said the document, signed by finance and agriculture ministers and dated Feb. 9.
The fund was initially meant to be financed by exporters via a 5 percent tax on the cost-insurance-freight price of cocoa.
However the tax was lowered to 1.28 percent for the 2013/14 season in order to allow the government to raise the farmer price for the October-to-March main crop harvest to 750 CFA francs per kilogramme from 725 CFA/kg last season.
"We lowered the tax and we had to compensate with a cash injection. That's what the government has now done," said a finance ministry source, asking not to be named.
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