In Côte d’Ivoire, for a month now, cocoa exporters have stopped buying futures contracts for the next production season. They are asking for a discount on taxes and especially on the quality premium called the “country differential”. Information revealed by Bloomberg Agency.
It is an arm that is invisible to the public, but which has already been going on for a month. It pits the largest Ivorian cocoa exporters, united within GEPEX, against the regulator of the sector, the coffee and cocoa council. This showdown concerns the future, more specifically cocoa production, which will be brought out of the ground next September.
Usually exporters buy futures contracts and pay taxes and miscellaneous premiums in advance. But this year, while expected production is estimated at 1.7 million tonnes, exporters have bought only 1.45 million tonnes. There are still 250,000 tonnes that the Ivorian regulator cannot manage to sell.
The “big five”, the five largest buyers present in the Ivorian market, have in fact decided to freeze their purchases with a claim for a discount on the so-called “country differential” premium, in other words the one paid to have the very best. reputed Ivorian quality.
This premium varies between £ 70 and £ 100 per person. Tons of cocoa, but this year buyers will see it reduced to just £ 20. And according to the Bloomberg agency, the Ivorian regulator is offering £ 75. We are still far from a compromise.
Buyers’ dissatisfaction is explained by the uncertainty, which does not weigh on production but on the world market. Because the Covid-19 pandemic has slowed foreign trade operations, caused a global economic crisis and increased uncertainty over chocolate consumption.
Still, if the situation continues, it is the producers who risk paying the price. If the quality premium is lowered, or if production is not sold, the guaranteed price to the producer may well fall. A scenario that no one starting with the authorities wants to see happen.