The

Required Report - public distribution

**Date:** 11/15/2003

**GAIN Report Number:** IV3009

IV3009

**Cote d\'Ivoire**

**Coffee**

**Semi-Annual**

**2003**

**Approved by:**

![](media/image1.wmf)Joe Lopez

U. S. Embassy

**Prepared by:**

Antoine Anzele

**Report Highlights:**

Post has revised downwards its forecast for 2003/2004 production due to
continued low producer price, prolonged political instability and poor
farm maintenance. Though crop outlook is satisfactory, most will not be
harvested. Harvesting activities of the 2003/2004 crop are very dull.
Exports fell in CY 2002 and expected to continue to fall in CY 2003 due
to reduced export demand and low level of world market prices. The
Inter-African Coffee Organization (IACO) has received \$2.2 million
donation from the African Development Fund of the African Development to
promote the quality, consumption and exports of coffee. The IACO is
holding its 43^rd^ Annual General Assembly in Abidjan with the main
agenda, adopting strategy to defend Robusta coffee producing countries
against EU sanctions for products containing Ochratoxin.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Semi-Annual Report

Abidjan \[IV1\]

\[IV\]

**Table of Contents**

[Executive Summary 3](#executive-summary)

[Trade 6](#trade)

# Executive Summary

Post has revised downwards its 2003/2004 production forecast due to the
continued low producer price, prolonged political instability and poor
farm maintenance. The current level of producer price leaves no margin
for farmers to maneuver. It has reduced considerably farmers' ability to
compete for farm labor already rendered scarce by the current unstable
political situation. Coffee production is difficult and requires much
labor. With the current level of producer price, many farmers consider
any effort towards coffee production as exercise in futility. The recent
drop in cocoa producer prices has further complicated the situation for
coffee production. Many farmers produce both crop and have been
subsidizing coffee production with higher revenues from cocoa. The
falling level in cocoa prices has dried up any support for coffee. Many
farmers are abandoning their farms leaving majority of farms in poor
state overrun by bushes.

Furthermore, Political situation remains unstable in the West of Cote
d'Ivoire that produces about 40 percent of Ivorian coffee. Many farmers
who fled the area at the onset of the war are yet to return undermining
production from this region.

Despite the poor state of the farms, crop outlook is satisfactory and
trees are bearing considerable amount of cherries awaiting harvest. This
favorable crop outlook is due to good rains during the crop development
period and the fact that tree stress from the poor farm maintenance is
yet to have its full toil. However, with the current low prices and the
dim prospects of improvement in prices, most of the crop is unlikely to
be harvested.

Harvesting for the 2003/2004 crop has started but activities are very
dull. Normally, cocoa harvesting takes precedent over coffee at this
time, but there is a glaring farmers' indifference towards the current
coffee harvesting.

Post has revised downwards its 2002/2003 production in line with
official estimates. The war situation and the low producer prices left
more farms than anticipated unharvested. In rebel occupied zones in the
West, most of crop was sold cheap to traders from neighboring countries
(Guinea, Mali and Liberia). Some farmers too continue to hold on to
their harvest in expectation of better price.

The minimum producer price in 2002/2003 marketing year was 200 F CFA/kg.
However, the average producer price improved to 252 F CFA/kg compared to
205 F CFA/kg in 2001/2002. Capral/Nestle, the local soluble coffee
processing company, offers relatively reasonable producer price for its
purchases and contributed to the increased average producer price. It
bought coffee at 250-300 F CFA/kg depending on the quality and its
purchases accounted for about a third of the total 2002/2003 production.
Producer price is expected to remain unchanged in the 2003/2004
marketing year.

Post has revised upwards its 2003/2004 planted area because the
anticipated conversion of coffee farms to other crops was minimal.

Exports fell in CY 2002 and are expected to continue to fall in CY 2003
due to the reduced export demand and the low level of world market
prices. Exports for the first 9 months of 2003 were 1,548,216 bags
compared to 1,966,016 bags for the same period in 2002.

Cote d'Ivoire is a member of International Coffee Agreement 2001 (ICA)
and also a member of the Inter-African Coffee Organization (IACO). In
furtherance of the (ICA) objectives, the IACO has received \$2.2 million
donation from the African Development Fund of the African Development
Bank to promote the quality, consumption and exports of coffee. This
fund will enable IACO to open degustation centers in Cote d'Ivoire,
Uganda, Zambia and Cameroon to serve as regional post for training,
quality assurance and capacity building.

The IACO is holding its 43^rd^ Annual General Assembly in Abidjan with
the main agenda; adopt strategy to defend Robusta coffee producing
countries of which Cote d'Ivoire is the leading producer. Robusta coffee
variety is supposed to contain Ochratoxin, considered as carcinogenic
substance. In 2004, the EU is expected to impose sanctions on producing
countries that do not respect the norms concerning this substance. Cote
d'Ivoire will be greatly affected should the sanction be applied.

Exchange Rate: U.S. \$1 = 558 F CFA on November 18, 2003.

  ------------------- ----------- ---------- ---------- ---------- ------------- ----------
  **PSD Table**                                                                  

  **Country**                                                                    

  **Commodity**       **Coffee,                                    (1000         
                      Green**                                      HA)(MILLION   
                                                                   TREES)(1000   
                                                                   60 KG BAGS)   

                      2002        Revised    2003       Estimate   2004          Forecast

                      USDA        Post       USDA       Post       USDA Official Post
                      Official    Estimate   Official   Estimate   \[Old\]       Estimate
                      \[Old\]     \[New\]    \[Old\]    \[New\]                  \[New\]

  **Market Year                   10/2001               10/2002                  10/2003
  Begin**                                                                        

  Area Planted        1492        1492       1492       1492       1350          1490

  Area Harvested      1170        1170       1160       950        920           850

  Bearing Trees       1630        1630       1630       1630       1459          1657

  Non-Bearing Trees   243         243        243        243        235           215

  TOTAL Tree          1873        1873       1873       1873       1694          1872
  Population                                                                     

  Beginning Stocks    1573        1573       1484       1484       466           779

  Arabica Production  0           0          0          0          0             0

  Robusta Production  3033        3033       2500       1817       2400          1300

  Other Production    0           0          0          0          0             0

  TOTAL Production    3033        3033       2500       1817       2400          1300

  Bean Imports        0           0          0          0          0             0

  Roast & Ground      0           0          0          0          0             0
  Imports                                                                        

  Soluble Imports     0           0          0          0          0             0

  TOTAL Imports       0           0          0          0          0             0

  TOTAL SUPPLY        4606        4606       3984       3301       2866          2079

  Bean Exports        2615        2615       3000       2025       2200          1600

  Roast & Ground      3           3          3          4          3             4
  Exports                                                                        

  Soluble Exports     440         440        450        428        460           430

  TOTAL Exports       3058        3058       3453       2457       2663          2034

  Rst,Ground Dom.     31          31         32         32         0             0
  Consum                                                                         

  Soluble Dom.        33          33         33         33         0             0
  Consum.                                                                        

  TOTAL Dom.          64          64         65         65         0             0
  Consumption                                                                    

  Ending Stocks       1484        1484       466        779        203           45

  TOTAL DISTRIBUTION  4606        4606       3984       3301       2866          2079
  ------------------- ----------- ---------- ---------- ---------- ------------- ----------

## 

# Trade

  --------------------- -------------- --------------------- --------------
  **Export Trade                                             
  Matrix**                                                   

  **Country**                                                

  **Commodity**         Coffee, Green                        

  Time Period           Jan-Dec        Units:                60 kg bags

  Exports for:          2001                                 **2002**

  U.S.                  56783          U.S.                  24283

  Others                               Others                

  France                1439917        France                435000

  Belgium               314650         Belgium               469100

  Italy                 498917         Italy                 198983

  Poland                136717         Poland                47850

  Algeria               550350         Algeria               873333

  Spain                 372517         Spain                 108600

  Germany               93600          Germany               30050

  Morocco               55783          Morocco               71371

  Portugal              49950          Portugal              71083

  U.K.                  36017          Tunisia               33600

  Total for Others      3548418                              2338970

  Others not Listed     171299                               79480

  Grand Total           3776500                              2442733
  --------------------- -------------- --------------------- --------------