ABIDJAN (Reuters) - A union representing a third of Ivory Coast’s 2,000 cocoa cooperatives launched a strike on Monday to seek increased government aid, potentially adding to supply concerns that have pushed prices to new highs.
The union, known as OPA, said it was seeking to block all cocoa deliveries to the No. 1 supplier’s ports.
“We are on strike for the financing of co-operatives, and for more support for producers and exporters,” said Kone Mamadou, president of the union.
U.S. cocoa futures closed on Monday at $3,305 a tonne, their highest level in over 15 months on existing fears of a poor 2009/10 season in the world’s top grower. Traders said the market was waiting to see how long the strike would last.
Ivory Coast’s cocoa industry, dogged by years of underinvestment since a 2002-03 civil war, ended its worst harvest in at least five years at the end of September with 1.178 million tonnes in port arrivals.
Farmers have complained of a lack of government support for the sector and burdensome taxes that have kept them from benefiting fully from a surge in world cocoa prices to near their highest in a quarter century.
Ivory Coast’s government has cut taxes for the 2009-10 growing season, which began October 1, in the hopes of encouraging increased production.
But deeper reforms of the sector are not seen until a new government comes in. A repeatedly delayed presidential election originally due in 2005 is now scheduled for November 29 but there are growing concerns it will be hit by fresh delays.
According to exporter estimates, cocoa arrivals at ports in Ivory Coast reached around 68,420 tonnes by October 18, compared with the 38,077 tonnes delivered by October 19 of the previous season. However those estimates are subject to revisions.