Cameroon cocoa market hit amid pricing instability and crop disease

A fresh report for cocoa in Cameroon has shown crop values have been negatively impacted by a combination of key factors including global price volatility, as well as disease impacting yields, writes Neill Barston.

The latest regional study, courtesy of market analyst Sean Hagarty, revealed a concerning picture for a nation that has also reportedly been hit by reported ongoing civil instability in its Anglophone area of the country, which is also believed to have further impacted agricultural production.

According to the latest sector report, cocoa prices are now trading 54 Francs/kg below robusta coffee, which is said to be an unprecedented inversion.

The ‘general price is now reported to be 1,805 FCFA/kg while robusta sits at 1,959, which comes as neighbouring Ivory Coast confirmed a 60% farmgate price cut to 1,200 FCFA/kg, adding regional downward pressure, reversing a previous farmer pay rise that was introduced last year that saw government-backed authorities raise cocoa prices by 60%, which has now been erased, causing significant concern to agricultural unions.

As the report noted, weather conditions remain challenging; sustained humidity above 89% in the Southwest region continues to trigger critical Black Pod disease risks and impede natural sun-drying.

Consequently, as the report from longstanding analyst Hagarty noted, the combination of major cuts to farmgate values, and disease-hit  combination of crashing farmgate prices, severe Black Pod risks from high humidity, and the March 19 fuel import suspension creates a compounding crisis.

Farmers lack capital for fungicides just as disease risk peaks, while fuel shortages threaten to strand whatever beans are harvested, exacerbating the structural supply deficit and increasing the likelihood of cross-border smuggling.

In addition, as the reported noted, on March 19, farmgate prices reportedly collapsed to 800-1,000 FCFA/kg, causing severe financial distress for many farmers.

Significantly, according to local news outlet, 237online, the situation had become so challenging that there had been reports of farmer suicides in the country due to the severity of the problem.

In additional, regional media has also noted another contributing negative factor to the market with the emergence of a port fraud scandal at Douala Port, which is said to have been a  1,745 billion FCFA case involving SGS scanning operations that was revealed on March 15. According to industry analysis, this could potentially cause administrative slowdowns affecting cocoa exports. For more information visit www.regionalert.com