Ivory Coast ups cocoa guide price 40 pct for '08/9

ABIDJAN, Oct 5 - Ivory Coast launched its 2008-2009 cocoa season on Sunday and raised the indicative farm-gate price by 40 percent, the head of an interim authority overseeing the cocoa sector in the world's top grower said.

Gilbert Ano N'Guessan, who heads a committee set up to manage the industry after many top officials were arrested in a graft probe, declared the season open but said purchases would likely be slow for at least two weeks as the market adjusted.

Industry officials said on Saturday new lists of approved exporters and levies to fund sector administration would not be ready until Monday, suggesting the season may have a slow start.

N'Guessan announced a new indicative farm-gate price of 700 CFA ($1.48) per kg for October-December 2008, up from 500 CFA/kg the previous quarter, but exporters dismissed it as unrealistic.

"If you ask my view, I'd say we will see purchases blocked from tomorrow for at least two weeks while producers see that the realities of the market have changed," N'Guessan said.

The indicative price is a guideline minimum, though buyers in Ivory Coast offer higher or lower prices depending on world market prices, quality, transport costs and other factors.

"It is absurd to fix the farm-gate price at 700 CFA when last Friday the price at the port was 610 CFA/kg. I think it is unrealistic and unworkable," said the director of a large international exporting company in the main port Abidjan.

World market prices <CCc2> reached a 28-year high of $3,290 per tonne in New York in July, but have since fallen back and closed on Friday at $2,488 per tonne, representing $2.49/kg on international markets, which take account of shipping costs.

"We have done well, because 700 CFA is a good price for us farmers and from tomorrow we will travel to the villages to tell farmers not to sell their cocoa for less," said Sanssan Kouao, a member of a farmers' group who attended Sunday's announcement.

FOCUS ON QUALITY

Quality problems with cocoa beans have worried exporters in Ivory Coast in recent months, and N'Guessan announced measures to improve quality, including banning the export of sweepings, residue and other leftovers from local grinding factories.

"The texts governing quality control companies will be more rigorously enforced to improve Ivory Coast's reputation as an origin," he said. "You can obtain better prices by delivering good quality cocoa. That is, well-fermented, well dried and well sorted cocoa."

Weather conditions have led to beans being smaller and allowed diseases such as black pod to spread in plantations. Exporters have forecast the 2008-2009 crop to be 6-8 percent down on the previous season, due mainly to black pod damage.

"Even the most optimistic forecasts unfortunately anticipate a fall in production. We must further improve quality to maintain our revenues," N'Guessan said.

Cocoa bean deliveries at Ivory Coast's two ports in the 2007-2008 season reached around 1.35 million tonnes by Sept. 28, two days before the season ended, exporters estimated. That was up from 1.29 million tonnes by the same date the previous year.

Details on new levies were unavailable after World Bank officials asked for the levy for sector bodies to be cut to 5.5 CFA/kg from over 26 CFA/kg, Marie-Louise Acquah, second vice-president of the management committee, told Reuters.

The World Bank's vice-president for Africa, Obiageli Ezekwesili, warned last month the Bank would lend Ivory Coast no money until it tackled "serious corruption" in the cocoa sector, which accounts for around 20 percent of the country's economy.