A pandemic-linked drop in global cocoa demand is hindering Ivory Coast's efforts to sell the remaining 500,000 tonnes of cocoa beans from its 2020/21 interim harvest, sources in the cocoa regulator (CCC) and local industry said.
Ivory Coast, the world's largest cocoa producer, sells 70-80% of its cocoa crop to exporters and chocolate makers via the CCC and sets a guaranteed price for producers before the start of the harvest in October.
But the coronavirus epidemic has disrupted the market this year, with global grinding down 4% on average in the most recent quarter and fears the trend could worsen given the second wave of infections in the northern hemisphere winter.
"It's a bit difficult in the current market environment and we're having some problems placing the 500,000 tonnes," a CCC source said.
Export Contracts
Since the start of October, export contracts for the mid-crop have been around 15,000-20,000 tonnes each compared with 50,000-70,000 in the same period in previous seasons, another CCC source said.
"Every day we're battling to sell," the second source said.
The interim harvest is sold between October and March, but this year multinational chocolate makers have large stocks due to the drop in demand and are slowing bean purchases and seeking to negotiate lower prices, although still buying, the sources said.
"There is little enthusiasm for mid-crop export contracts," the director of a European export company based in Abidjan told Reuters on condition of anonymity.
Exporters, who act as intermediaries between the CCC and the multinationals, want greater flexibility from the regulator in terms of the size and pricing of contracts due to the lacklustre market conditions, the director and another head of an Abidjan-based export firm said.
News by Reuters edited by Checkout. Edited by Donna Ahern. Click subscribe to sign up for the Checkout print edition.
