- The regulator however maintained a $400/tonne premium known as the living income differential (LID) that was introduced this season to boost farmers' incomes.
- A bumper crop and weak global demand caused by the pandemic, coupled with the introduction of the LID, left piles of unsold beans in warehouses in Ivory Coast.
ABIDJAN: Ivory Coast started selling cocoa contracts for the 2021/22 season two weeks ago, six months later than usual, because it needed to clear stocks from the previous harvest, sources from the industry regulator and exporters said on Tuesday.
The sector regulator in the world's top producer, the Cocoa and Coffee Council (CCC), has sold between 80,000 and 100,000 tonnes, with a discount of 100-200 British pounds ($139 -$278) on the premium for cocoa from Ivory Coast, the sources said.
The regulator however maintained a $400/tonne premium known as the living income differential (LID) that was introduced this season to boost farmers' incomes.
A bumper crop and weak global demand caused by the pandemic, coupled with the introduction of the LID, left piles of unsold beans in warehouses in Ivory Coast.
The LID is an initiative by Ivory Coast and Ghana to tackle farmer poverty, but producers such as Nigeria, Cameroon and Ecuador are not involved in the scheme and have plentiful cocoa available at lower prices.
"We are selling with a differential of 100 to 200 pounds (sterling) per tonne right now because the market is not very good, but we expect it to improve with COVID vaccinations starting around the world," said a source at CCC who requested anonymity.
Exporters said the country will likely have to offer an even bigger discount to tempt buyers if it wants to reach its target of selling 1.4 to 1.6 million tonnes before September.
"Sales started very late and that is going to put pressure on the CCC to sell the whole harvest. It will be necessary to lower the differential more to accelerate sales," said the director of a European export company in Abidjan who requested anonymity.
Exporters said that despite vaccinations improving the pandemic outlook in many countries, demand for cocoa has not showed signs of increasing.
"There are about 1.6 million tonnes to sell between now and September and it is going to be tricky to reach this goal without making sacrifices," said the director of another international export company in Abidjan.