Cocoa prices continue downward, with London cocoa posting a one-month low on Wednesday after the European Commission unexpectedly postponed its flagship European Union Deforestation Regulation (EUDR), which was supposed to be implemented on 30 December 2024.
Anthony Myers
The law's postponement by 12 months allows certified cocoa stockpiles held at European warehouses to be used to satisfy contracts, reducing concerns that the new law would lead to the cocoa's decertification and limiting existing cocoa supplies.
barchart.com reported that New York cocoa recovered from a three 1/2-week low on Wednesday and posted moderate gains on signs of tighter stockpiles.
Cote d'Ivoire, the world's biggest cocoa producer, has announced a minimum farmgate price of 1,800 CFA francs ($3.09) per kg ($3.03/KG), a 20% increase from last season.
Farmers groups have been disappointed by the announcement. They have been demanding the government keep its word and set the purchase price per kilogram of coffee and cocoa at 60% of the CIF price: 2767.883 CFA francs per kilogram ($4.67/KG).
The CIF price stands for cost, insurance, and freight and is the price of goods at the importing country's border.
Ivorian farmers argue that if the 60% CIF rule were enforced, the farmgate price would have to be at least 5,000 CFA francs per KG.
The new farmgate price in Cote d’Ivoire is equivalent to $3,060 per ton, slightly higher than the $3,039 per ton offered by neighbouring Ghana, the world’s second-largest cocoa producer.
Anthony Myers
Farmgate price increases in both countries are an attempt to curb smuggling to countries like Liberia and Guinea, where buyers offer prices closer to the global market.
At a press conference with local media announcing the new price, Ivorian agriculture minister Kobenan Kouassi Adjoumani said the 2023-24 season was marked by a 25% drop in cocoa production in West Africa caused by adverse weather and disease.
Ghana's 2023-24 cocoa harvest sank to a 23-year low of 425,000 MT.