* Mid-crop farmgate set at 700 CFA francs/kg
* Represents 25-franc reduction of main crop price
* Farmers happy, exporters sceptical
(Adds farmer and exporter comments, details)
By Loucoumane Coulibaly
ABIDJAN, March 29 Ivory Coast fixed a cocoa
farmgate price of 700 CFA francs ($1.37) per kg for the
April-to-September mid-crop, the head of the marketing board
said, a higher-than-expected figure that pleased growers but
left exporters sceptical.
The world's top cocoa producer forward sold the bulk of its
2012/13 harvest in order to introduce a guaranteed price for
farmers at the start of the season in October.
The auctions, part of sweeping reforms aimed at improving
the livelihood of farmers, ended more than a decade of sector
liberalisation and a system of spot buying.
"The proposed 700 CFA francs per kilogramme represents a
very incentivising price for the farmers," Lambert Kouassi
Konan, chairman of the Coffee and Cocoa Council (CCC), told
journalists in Abidjan on Friday.
"We've seen a very visible improvement in quality (this
season), proving that the farmers are capable of producing
good-quality beans," he said.
Mid-crop beans are typically smaller and of lower quality
than those of the main crop and fetch a lower price on the world
market. The new price represents a 25 franc discount on the main
crop farmgate of 725 CFA francs per kg.
"We can work with that. Before, we were getting 400 or 500
(francs) during the mid-crop. This is already much better," said
Dieka Issa Ouattara, who farms near the western town of Fengolo.
The CCC also announced a maximum bean count - the measure of
bean size - of 120 beans per 100g for the mid-crop.
"For the farmers, this price isn't bad. And with this bean
count there will be no problem," said Marcel Aka, the head of a
farmer cooperative based in Daloa.
Kouassi said the main crop price had succeeded in stopping
the flow of smuggled cocoa across the border into neighbouring
Ghana, the world's number 2 producer, where government-enforced
prices have long exceeded those in Ivory Coast.
Production for the season is lagging behind 2011/13 levels,
however, he said.
"We've observed a drop in production. We are waiting for the
end of the (main crop) harvest to have a real idea of the
trend," he said.
NOT MANY TAKERS
Exporters had demanded a discount of 80 CFA francs/kg on the
cost, insurance and freight (CIF) export price after the CCC
initially offered a 30 franc reduction during talks in December
The new CIF price of 1,157 CFA francs/kg represents a 51
franc discount, including 25 francs coming from the reduction in
the farmgate price.
The source of the remainder of the discount was unclear,
though exporters said at least some of it was due to a reduction
in percentage-based taxes.
"It's going to be hard. It's a high price for cocoa that
isn't good quality," the head of a San Pedro-based export firm
The mid-crop harvest typically attracts fewer bean exporters
than the larger main crop, and much of the production is
channelled towards firms with processing facilities in Ivory
Under the reform, Ivory Coast, which is also the world's
leading grinder of beans, aims to boost its processing capacity
and locally transform half of its output into semi-refined
products. It currently grinds around a third of its beans.
The purchases manager of an Abidjan-based exporter said the
new price may benefit Ivory Coast-based processors.
"It requires some close analysis, but I'm not sure there
will be a lot of takers. But maybe the grinders will buy it," he
($1 = 510.8300 CFA francs)
(Reporting by Loucoumane Coulibaly; Writing by Joe Bavier;
Editing by Daniel Flynn and Jane Baird)