Producers in the world’s fifth-biggest cocoa producer have seen farmgate prices slump by more than a third in the past year as London future contracts declined on forecasts of an oversupply. Cameroon, which produced 269 495 metric tons in the year through July, is in the third year of a strategy to increase annual output to more than 600 000 tons by 2020.

“The falling prices are seriously discouraging farmers,” Jerome Mvondo, director-general of the Cameroon Cocoa Development Corporation, said Monday in an interview in the capital, Yaounde. “That plan is unrealistic and unattainable.”

While the strategy to increase output envisaged new plantings of about 100 000 hectares (247 105 acres) every year, Cameroon only achieved growth of 2 500 to 3 500 hectares since 2014, Mvondo said. The government has also cut subsidies for inputs such as fertilizers and pesticides by 30 billion CFA francs ($49.8 million) this season, he said.

Earlier on Monday, the government said it had asked an emergency committee to compile a strategy on how to deal with the impact of low prices. The committee should consider how the country can process more cocoa locally to cope with volatile prices, Trade Minister Luc Magloire Mbarga Antangana said in a statement handed to reporters.

“Our message to farmers is not to hastily rush out of the sector out of panic, because there is going to be a way out,” Mbarga said in the statement.

Cameroon processes about 25 percent of its cocoa locally, according to the regulator, the National Cocoa and Coffee Board. The sector accounts for 3 percent of the country’s gross domestic product.

Cocoa for July delivery rose 4.8 percent to close at $1 955 a ton on ICE Futures US in New York on Monday, after stockpiles monitored by ICE showed their first weekly drop in 14 weeks. The increase was the biggest by a most-active contract since March 20 and pares the decline in the past 12 months to 36 percent.

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