Ivory Coast Cocoa Exporters Said to Avoid Buying Near Ghana
(Bloomberg) -- Some cocoa exporters in Ivory Coast are declining to buy beans from regions near the border with Ghana as smuggling is making purchasing the crop unviable, according to two people familiar with the matter.
Cocoa exporters are not offering finance to buyers and cooperatives as farmers prefer selling their beans in Ghana because of higher producer prices in the neighboring country, said the people, who asked not to be identified because they’re not authorized to speak publicly about the matter. Exporters fear they will not be able to source enough beans to recover their funding, they said.
The region, which includes cocoa growing areas near towns and villages such as Abengourou, Aboisso and Noe, accounts for about 15 percent of the production of the world’s biggest cocoa grower.
Mariam Dagnogo, a spokeswoman for regulator Le Conseil du Cafe-Cacao, declined to comment when contacted by phone.
A price difference of more than 30 percent with neighboring Ghana, the second biggest cocoa producer, is encouraging farmers in Ivory Coast to smuggle their beans across the border in search of higher pay. The minimum price that buyers are allowed to pay farmers for their crop is the equivalent of $1,205 per ton in Ivory Coast and $1,733 per ton in Ghana.
The disparity came after Ivory Coast lowered pay, in step with a similar plunge in international prices, while Ghana chose to keep farmer earnings unchanged.
“Cocoa cooperatives are dying here because they’re not getting any funding,” said Koffi Bredou, the head of a local buying organization in the region. “We are organizing ourselves to strengthen security at the borders to avoid smuggling.”
Ivory Coast’s total arrivals for the first three weeks of the new season since Oct. 1 are about 110,000 tons, compared with 143,000 tons for the same period last year, a person familiar said earlier this week.
©2017 Bloomberg L.P.