June 25, 2019
In Côte d'Ivoire, the government is betting on a renewed interest in cocoa cultivation among young people thanks to the minimum price of $ 2,600 per tonne that it is currently negotiating with Ghana and stakeholders in the industry. That's what Bloomberg reports quoting the Ministry of Commerce.
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According to Souleymane Diarrassouba, in charge of the portfolio, the average age of producers is now around 50 because of the preference of young farmers to cultivate more profitable crops such as cashew, rubber, cotton and the oil palm.
Currently, the producer guaranteed floor price is almost 30% lower than the price that was in effect three years ago. "The new generation must be attracted to the industry. The higher cocoa prices, the more farmers will improve their incomes. There is no chocolate without cocoa farmers, " says Diarrassouba.
On the expert side, it is believed that this optimistic view could hide a much more complex market reality. Indeed, according to some observers, if the floor price were to be adopted unanimously, it would indeed push for renewed interest, but in the short term.
In the long run, there may be overproduction in many countries, which would pull futures prices down. This could ultimately discourage some farmers or even encourage the major producing countries to reduce the minimum price to be in line with the market.
As a reminder, the cultivation of cocoa is carried out by nearly 800,000 farmers in Côte d'Ivoire.
Hope Olodo
Source: Agence Ecofin
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