Feb. 11 (Bloomberg) -- Ivory Coast, the world’s largest cocoa producer, plans to make available a fund with at least 40 billion CFA francs ($80 million) to buyers of the beans, Finance Minister Charles Koffi Diby said. The so-called stabilization fund is likely to start in September as part of changes that include selling the crop before the harvest under a pre-selling auction system, Diby told reporters in Abidjan today.
“The fund is meant to manage the risks of the forward sales system,” Diby said. “The fund already contains five billion CFA francs.”
Ivory Coast earned about $600 million in export taxes from cocoa last year, its biggest revenue from international trade, according to the International Monetary Fund. The fund will be financed with taxes collected when cocoa bean deliveries are registered for export, Diby said.
In an industry reform plan obtained by Bloomberg in November, payment to a purchaser will take place if the price agreed to ends up higher than the price closer to delivery.
The exporter will have to pay back to the fund if the agreed price ends up much lower than price closer to delivery, it said.
The West African nation is restructuring its cocoa industry to guarantee farmers get a minimum cocoa price equal to 60 percent of the international price for the 2012-13 harvest.
Reforms in the cocoa sector are a condition for the country to qualify for debt relief under the World Bank-led Highly Indebted Poor Countries (HIPC) initiative.
A new state-controlled organization, the Coffee and Cocoa Council (CCC), began forward sales of the crop on Jan. 31.
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