Ivorian cocoa arrivals ease, farmers seek high price

ABIDJAN, Oct 13 (Reuters) - Cocoa arrivals at ports in Ivory Coast dropped slightly in the second week of the 2008/09 season due to delays and farmers' reluctance to sell beans below a generous reference price, exporters said on Monday. Shippers welcomed a reduction in industry levies, but said it was not enough. They added last week's 40 percent increase in the reference farm-gate price had raised farmers' expectations to unrealistic levels, putting a damper on purchases.
Exporters estimated around 16,000 tonnes of beans were delivered to the West African state's two ports in the week of Oct. 7-12, down from 40,099 tonnes in the same week a year ago and from 18,000 tonnes the previous week this year.
Total port arrivals reached around 34,000 tonnes by Oct. 12, compared with 70,173 tonnes in the same period last year.
`There is not much cocoa coming into the port at the moment. Farmers are sitting on their beans and asking for the full 700 CFA francs/kg. We would like to pay that, but the market won't allow us to do so at the moment,` said Ali Lakiss, managing director of exporter Saf-Cacao at the port of San Pedro.
Ivory Coast's cocoa management committee raised the reference farm-gate price by 40 percent to 700 CFA francs/kg when it opened the new season on Oct. 5. [ID:nL5110072]
The reference price is a recommended minimum rather than an officially-enforced rate in Ivory Coast's liberalised system, but industry officials have urged farmers to seek high prices.
`Since last week merchants and buyers have not been going into the bush because they can't pay what the farmers are asking. They'd rather wait, so we get no cocoa,` Lakiss said.
He said that without the price problems San Pedro arrivals last week could have been double the actual 10,000 tonnes.

HARD BARGAIN
`The fixed price is blocking purchases in the bush ... There is cocoa in the bush. The farmers just need to agree to sell it at the market price,` said the director of a large European exporting company in the country's other port, Abidjan.
Due to administrative disruption, farm-gate prices have not been officially reported for months. Buyers and farmers have quoted prices of 400-500 CFA ($0.83-$1.04) /kg in recent weeks.
Benchmark U.S. cocoa futures <CCc2> traded on Monday at $2,331/tonne ($2.33/kg), down about 30 percent from a long-term high of $3,290/tonne in July.
Prices paid to farmers are well below international market rates due to various taxes, a host of transport and other costs and merchants' and exporters' cost and profit margins.
The industry management committee set the taxes for the new season last Friday, cutting levies to pay for administration by 17.85 CFA francs ($0.04) per kg and bringing the total payments to 251.26 CFA francs ($0.52) per kg. [ID:nLD257345]
The management committee, put in place this year after a graft probe, has taken over responsibility for a range of industry bodies which previously each received a separate levy.
An additional port registration tax was left unchanged at 10 percent of the cost, insurance, freight (CIF) cost of goods.
`If farmers are asking for 700 CFA/kg when the international market really only allows us to pay 400, we will follow the market. That is our only reference -- nothing else,` said the director of a large international exporter in Abidjan.
`It's good the government has cut taxes this year, especially the industry levies, but that is not going to mean we can pay out 700 CFA/kg,` he said. ($1=482.5 Cfa Franc)

Source : Reuters