CAMEROON- For the third time now two weeks, there has been a surge in cocoa prices in Cameroon with farm gate prices soaring to CFA1,700 (US$2.76) per kilogram from just CFA 1,500 (US$2.47) two weeks earlier.
The current price rally is an interesting turn of events given that cocoa farm gate prices averaged around CFA 1,200 (US$1.95) per kilo last season and it took the government’s intervention to have the prices raised to CFA 1,500 at the start of the 2023 season.
Its timing is also surprising, to say the least as it is happening during the rainy season, a period when prices usually fall due to the poor state of access roads, pointing to a positive trend in prices throughout the season.
Reduced supply could be one of the reasons for the price rally beyond the government-mandated price.
For the 2022-2023 season which ended on September 7, 2023, official figures by the National Cocoa Coffee Council (ONCC) indicate that cocoa output decreased by 11.2% with producers harvesting 262,112 tons of beans, compared to 295,163 tons the previous season.
A status report published by the Council clarified that the decline was expected because of the vegetative rest period, coupled with the adverse effects of climate change and the security situation in the Southwest and Northwest production basins.
Other factors include “the rising cost of agricultural inputs due to the conflict in Ukraine and illegal and massive exports to Nigeria,” the report said
Additional data from ONCC indicate that local cocoa processors (both industries and artisanal units) were able to handle 89,204 tons of beans during the campaign, compared to 86,850 tons in the previous year.
While the 2022-23 cocoa campaign has seen a surge in the volume of locally processed cocoa beans, the entry of Africa Processing into the cocoa processing sector is poised to add its weight during the season reviewed.
Ivory Coast halts cocoa forward sales as floods wreak havoc
Meanwhile, the Ivorian government has stopped selling contracts for cocoa exports for the 2023-2024 season after heavy rains caused disruptions making roads impassable and also leaving farms flooded as reported by Reuters.
This has led to uncertainty among suppliers as the ban is bound to shrink the West African nations’ earnings which account for about 40% of its export earnings.
Yves Brahima Kone, director general of the Coffee and Cocoa Council (CCC) noted that sales before the suspension had exceeded one million tonnes and were projected to rise to 2.2 million tonnes this season
“We expect much less cocoa in the first part of the main harvest compared to this season. We hope that the production from January to March will help balance our volumes, otherwise, it will be a problem,” Kone noted