In Côte d’Ivoire, the local subsidiary of French group Société Générale, launches a new Price Fluctuation Coverage Product designed for cocoa producers.

This offer from WAEMU’s largest bank comes in a context where the sector is still suffering from a sharp drop in farm-gate prices, due to failure on the delivery system. According to auditing firm KPMG, the new offer is expected to prove effective as cocoa sale system would benefit from reverting to the cash on delivery method.

Analysts are concerned whether Société Générale will manage cocoa export contracts better than the Coffee-Cocoa Council. According to them, the best way would be to leave the market and manage the future contracts. Let’s note that this is an opportunity for BRVM to establish a sub-fund for financial derivatives, which would foster a more efficient and transparent management of cocoa buying and selling operations.

Yet, this option would not be reached in the short term. BRVM must first work to maintain client companies and attract new investors and issuers. Still, BRVM’s low liquidity and low trading volumes on cocoa market may not reassure about its medium-term ability to manage financial derivatives.

Idriss Linge