June 14 (Bloomberg) -- Ivory Coast, the world’s largest cocoa producer, will refund exporters and processors buying undersized beans to allow them to resume purchases and shipments, industry regulator Le Conseil du Cafe-Cacao said.
Refunds will apply to purchases of cocoa batches containing 116 to 140 beans per 100 grams (3.5 ounces) made June 17 to July 31, the Abidjan-based CCC said on its website today. The payments will vary from 58 CFA francs (12 cents) to 130 CFA francs per kilogram (2.2 pounds).
Shippers and grinders asked for bigger discounts for batches of more than 115 beans per 100 grams, the CCC said. Processors and traders had said the price paid for beans from the smaller of two annual harvests that runs from April to September didn’t match the quality of beans for sale, Lome, Togo-based lender Ecobank Transnational Inc., which finances the trade in Ivory Coast, said in a report e-mailed yesterday.
“The discounts will apply mostly to mid-crop beans and it shows that there was a massive pressure from traders and processors on the government,” Edward George, head of soft commodities reasearch at the bank, said by phone today. “This is a positive development for cocoa flow, but we will need to see how arrivals pan out.”
Farmers in Ivory Coast say they can’t sell supplies from the mid-crop because dry weather left beans too small. The country will allow shipments of a maximum of 120 beans per 100 grams, the Ministry of Finance said on April 2. Sizes from a 246-farmer cooperative in the eastern town of Abengourou are on average 140 to 150 beans per 100 grams, Leon Adou Edoukou, head of the group, said on May 8.
The refund was agreed June 6 “in the interest of guaranteeing producers a stable revenue and to allow exporters to resume their buying and export activity,” the board wrote. “No discount is allowed on the guaranteed field-side price.”
Cocoa for delivery in July fell 1.9 percent to 1,477 pounds ($2,313) a ton on NYSE Liffe in London and earlier today dropped to 1,469 pounds, the lowest price for that contract since April 9.