May 10 (Bloomberg) -- Farmers in Ivory Coast, the world’s biggest cocoa producer, say they can’t sell supplies from the country’s mid-crop harvest because dry weather left beans too small to meet minimum requirements.
Ivory Coast will allow exports when there are a maximum of 120 beans per 100 grams (0.2 pounds) in supplies from the shorter of the country’s two seasons, which runs from April to the end of September, the Ministry of Finance said April 2.
“I haven’t been able to sell any of my beans since early April,” Leon Adou Edoukou, head of a 246-farmer cooperative in the eastern town of Abengourou, said by phone May 8. “We have on average between 140-150 beans per 100 grams.” More than 4.5 metric tons of beans are stored in the cooperatives’ warehouses, he said.
The farmers’ inability to sell their beans may hit cocoa exports from Ivory Coast, which will account for about 37 percent of global cocoa output in 2012-13, according to an estimate by the London-based International Cocoa Organization. Shipments dropped to 1.432 million tons in 2011-12 from 1.44 million tons the previous season. Cocoa futures have gained 7.3 percent on NYSE Liffe in London this year, and 4.2 percent on ICE Futures U.S. in New York.
Cocoa beans are usually smaller during the mid-crop and the size requirement, a measure designed to maintain quality, is lower than in the main October-March harvest, for which the Cocoa-Coffee Council, the industry regulator, stipulated a maximum of 100 beans per 100 grams for exports.
Beans are smaller than usual because dry weather hit cocoa-growing regions in January and February, Edoukou said. Ivory Coast will reap a cocoa crop of 1.35 million tons in 2012-13, Lome, Togo-based Ecobank Transnational Inc. said in a report e-mailed on March 21, which would be 9.2 percent less than the previous year, according to the bank.
Farmers also may be finding it hard to sell mid-crop beans after Ivory Coast scrapped tax breaks for local grinders and implemented a new tax system under which processors have to pay levies on the weight of beans they use rather than the products they ship. The tax measures made it costlier to process beans in Ivory Coast than in Europe, Tristan Borne, cocoa and chocolate managing director at Perpignan, France-based chocolate maker and processor Cemoi, said in November.
Beans from the mid-crop are more likely to stay within the country to be processed locally due to their lower quality, said Laurent Pipitone, the head of the economics and statistics unit at the ICCO, who estimated a mid-crop of 440,000 tons in 2012-13 from 438,000 tons last year.
Globally, demand for cocoa will exceed supply by 45,000 tons in 2012-13, the ICCO forecast in February. Global production will outpace consumption by 11,000 tons in the season ending Sept. 30, Macquarie Group Ltd. estimated on May 3, reversing a previous forecast for a shortage on recent rainfall and good sunshine in Ivory Coast, the bank said.
Jonas Kouadio, a farmer based in Duekoue in western Ivory Coast, said he was also struggling to sell his produce.
“I have been trying to sell 10 tons this week but I couldn’t as I have 130-140 beans per 100 grams,” Kouadio said by phone yesterday.
Theodore Guetat, head of a cooperative of 1,100 farmers in Abengourou, said he was able to sell some beans because he mixed them with part of remaining output from the main harvest. His cooperative has about 2,000 tons of stockpiled beans waiting to be sold, he said by phone on May 8.
“If they can’t sell their output, farmers will be tempted to send their beans illegally” to buyers in neighboring Ghana, Guetat said, adding that the output prospects for his cooperative for the mid-crop “don’t look very good.”
Cocoa producers may also sell their beans below the minimum price of 700 CFA francs ($1.40) per kilogram (2.2 pounds) set by the government at the beginning of the mid-crop, farmers said.
Ivory Coast introduced changes in its cocoa industry in 2011, including a plan to sell most of the beans before the harvest and a move to guarantee farmers a minimum fixed rate for their beans.
“I have no choice but selling off my output,” farmer Seydou Doumbia, based in Daloa, in the west of the country, said by phone yesterday. Doumbia said he sold 3 tons of beans this week at 675 francs a kilogram.