High cocoa prices are encouraging Ivorian farmers to increase spending on fertilisers and pesticides after a long hiatus, industry sources said, suggesting that crop yields from the world’s largest grower may rise.
Concerns over the looming supply deficit and growing demand for chocolate pushed world cocoa prices neared a three-year high on Friday.
Farmers are expecting higher prices next season when a global supply shortfall is forecast and are investing even more in plantation upkeep.
Most plantations in Ivory Coast date from the 1980s and 1990s and require constant husbandry and investment to improve productivity, industry experts say.
Diseases such as swollen shoot and black pod, as well as insect infestations, have hit crop yields in recent years.
« For a few years, I have not looked after my plantation properly because of lack of money, but this year I’ve bought more insecticide and fungicide, » said Adama Konate, who farms 6 hectares of cocoa in Soubre.
« I want to increase production and earn some more money. »
Growers complain that fertiliser prices have risen by 30 percent since 2010, while insecticides and fungicide prices have climbed by 25 percent over the same period.
Two years ago, however, Ivory Coast abandoned a decade of sector liberalisation and began forward selling its crop in order to guarantee farmers at least 60 percent of the international price.
That has helped to increase returns to growers and boost production. The International Cocoa Organisation (ICCO) has forecast that Ivory Coast’s 2013/14 cocoa crop, which runs from October to September, will hit a record 1.7 million tonnes.
The country produced 1.415 million tonnes in its 2012/13 crop.
Better husbandry
According to a study from Armajaro Research, just 11 percent of Ivorian farmers applied fertilisers to their plantations in 2012. But that rose to 20 percent in 2014.
The use of pesticides jumped from 50 percent to 80 percent during the same period.
« Farmers are clearly more inclined to buy inputs with the prices we’ve seen recently. And that will certainly impact production, » said Laurent Sauron, Armajaro’s research director.
Importers of fertiliser, pesticides and fungicides confirmed that increased demand has pushed them to acquire more stocks.
« Generally speaking, imports are up 30 percent compared to last year and we are optimistic for the future, » said Stephan Ouedrago, the finance director for Callivoire, one of Ivory Coast’s largest importers of agrochemicals.
The ICCO has forecast a global cocoa deficit of 75,000 tonnes in 2013/14.
Officials have suggested next season will also finish with a shortfall. Rising output from Ivory Coast has been partly offset by falling production in other producers, such as Indonesia, Cameroon, Nigeria and Ecuador.
The deficit should translate next season to an increase of the farmgate price, which was fixed at 750 CFA francs ($1.55) per kg at the beginning of the 2013/14 season.
Industry sources and farmers expect a price of at least 800 CFA francs next season, which would allow them to invest even more in plantation upkeep. Reuters
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