Ivory Coast is planning to remove all private representation from the board of its cocoa regulator as the world’s biggest grower prepares to coordinate the marketing of beans with neighboring Ghana, according to two people familiar with the matter.
Based on the proposal that the government intends to implement next year, cocoa grinders, exporters and lenders will no longer have delegates on the board of Le Conseil du Cafe-Cacao, said the people, who asked not to be identified because they’re not authorized to speak publicly about the matter. The government is of the view that the private sector’s interests are conflicted and will obstruct reforms that are planned to harmonize sales with Ghana, said the people.
Spokesmen for the government and CCC didn’t answer calls seeking comment.
The plans follow an undertaking between Ivory Coast and Ghana, the biggest cocoa producers, on cooperation to exert more influence over the global market through the harmonization of marketing systems. Ivory Coast was forced to cut pay for its estimated 800,000 farmers by more than a third last year, following a slump in prices.
The West African neighbors operate very different marketing systems for their cocoa, which means that attempts to harmonize them would probably require that one or the other change. In Ghana, the regulator purchases all the cocoa that farmers produce, while Ivory Coast auctions the right to export beans and regulates sales. The two countries haven’t communicated proposals on how a harmonized system will operate.
Private-sector stakeholders are yet to be formally informed about the proposed changes to the CCC board, said the people. The government will encourage shippers, lenders and grinders to form an independent consultative body to communicate regularly with the regulator about sector issues, said the people.
Apart from the representatives for grinders, shippers and lenders, the CCC board also have seats for delegates of President Alassane Ouattara, Prime Minister Amadou Gon Coulibaly, farmers and the ministries of agriculture, commerce, industry and economy and finance.
In a first step toward the harmonization of their sectors, Ivory Coast and Ghana undertook to announce the minimum pay for their producers at the same time ahead of the new season’s start in October.
The Millennium Challenge Corporation, the U.S. government’s main development fund, said it had signed a $524.7 million investment compact with Ivory Coast to build schools and improve roads around the busy port in the commercial capital Abidjan.
The five-year compact was signed at the State Department between Ivory Coast President Alassane Ouattara and Jonathan Nash, the MCC’s acting chief executive.
MCC investments are aimed at showcasing countries with good policies and the body’s seal of approval is meant to attract foreign investors. Split from 2002 to 2011 between rebels in the north and government forces in the south, Ivory Coast has since become one of the world’s fastest growing economies and is regularly cited as a model of post-conflict renewal.
The MCC said its grant funding would help build 84 secondary schools and train teachers to boost education in a country where roughly 40 percent of the population is under 14. It said its investments in the Abidjan Transport Project will help rebuild the road network around Abidjan’s port, among the busiest in sub-Saharan African, and reduce transport costs.
Ivory Coast started producing power on Thursday at a 275 megawatt (MW) hydroelectric plant that will boost the country’s electricity output by more than 10 percent.
Ivory Coast, the world’s top cocoa grower, has emerged from a decade-long political crisis as Africa’s fastest-growing economy, but that growth has strained power supplies. The new plant near the southwestern city of Soubre was financed by a $500 million low-interest loan from China’s Export-Import Bank and built by China’s state-owned hydropower engineering firm Sinohydro Corp.
“The Soubre dam will allow Ivory Coast to produce abundant and inexpensive electricity,” President Alassane Ouattara said at the inauguration ceremony. “We are going to continue constructing other hydroelectric plants.”
Sinohydro started construction on Thursday of another 112 MW hydro plant near Soubre, which is expected to take three years to build. The Ivorian government will fund half of the $306 million cost, with the rest coming from bilateral donors.
Unlike many countries in sub-Saharan Africa, Ivory Coast has a reliable power supply. It exports electricity to neighbours Ghana, Burkina Faso, Benin, Togo and Mali, and plans to extend its grid to Liberia, Guinea and Sierra Leone this year.
But with domestic consumption rising by about 10 percent a year, the government is under pressure to boost supply at home and aims to increase output to 4,000 MW by 2020, from the current 2,275 MW.
Ivory Coast, the world’s top cocoa producer, set its guaranteed price for farmers at 700 CFA francs ($1.27) per kilogram for the 2017/18 main crop season, the Coffee and Cocoa Council (CCC) marketing board said on Sunday.
Lambert Kouassi Konan, the chairman of CCC’s board, announced the price at a ceremony marking the start of the season, adding the cocoa registration tax had been eliminated in order to boost the farmers’ price.
“I can tell by your silence that you are worried by this decision. But I would like you to know that this isn’t easy. If we had relied simply on our theoretical calculations, we should have paid even lower than this price,” Konan said.
Ivory Coast was hit hard last season by a steep drop in London and New York cocoa prices that provoked a wave of contract defaults and forced the CCC to slash the farmer price by more than a third to 700 CFA/kg for the April-to-September mid-crop.
Neighbouring Ghana, the world’s number two cocoa grower, maintained its price throughout the last season and has hinted that it will keep it unchanged or even raise it in 2017/18. That would open a significant price gap with Ivory Coast, raising the risk of large-scale smuggling of Ivorian beans into Ghana.
Scattered rain in most of Ivory Coast's main cocoa growing regions will help the April-to-September cocoa mid-crop though hot weather in other areas threatened to hurt the harvest, farmers said on Monday.
The dry season in the world's top cocoa producer runs from mid-November to March, during which downpours are scarce with February and March normally the hottest months. Exporters and pod counters have predicted record cocoa production of nearly 2 million tonnes this season due to good weather. But farmers said they would need at least one downpour per week for good pod growth while the heat continues. In the western region of Soubre, at the heart of the cocoa belt, farmers reported light rain and sunshine last week.
"We need heavier rain because it is very hot and the water evaporates quickly from the soil," said Lazare Ake, who farms on the outskirts of Soubre. "We have enough flowers and small pods to produce a good mid-crop. But the soil can't be too dry."
In the centre-western region of Daloa, which accounts for about a quarter of national output, farmers reported one heavy downpour and abundant sunshine. "The leaves are starting to turn green on some plantations. If the rain continues to be good we will have enough flowers and pods on the trees in April," said Raphael Kouadio, who farms on the outskirts of Daloa.
He said, though, that he was worried some beans might be small because the rain came late. Farmers reported light rain and hot temperatures in the western region of Gagnoa while in the western region of Bouafle farmers said some leaves were drying out.
"It is too hot. This is not good for the cocoa ... it could reduce the harvest by killing flowers and small pods," said Parfait Ayo, who farms on the outskirts of Gagnoa.
Farmers reported good growing conditions in the southern regions of Aboisso and Agboville and in the western region of Duekoue, and one heavy downpour in Abengourou in the east.