Ivory Coast cocoa glut fuels cross-border smuggling
A cocoa glut in top producer Ivory Coast that has driven down prices and paralysed buying is also fuelling a rise in the smuggling of beans to neighbouring countries, farmers and exporters said on Tuesday.
Cocoa has been piling up at Ivorian ports and left rotting on trees after some exporters defaulted on export contracts, having wrongly speculated that prices would extend the gains seen over the previous five years.
"We're having problems selling here. Lots of cocoa is heading across the border with Ghana where it's being sold for 900 CFA francs ($1.45) per kilogramme," said Lambert Kouassi, a farmer near Abengourou in eastern Ivory Coast.
"The farmers don't have a choice. They need to take care of themselves and feed themselves," he said.
Under Ivory Coast's cocoa marketing system, the government sets a guaranteed price for farmers at the start of the season based on the average price attained in forward sales. The measure, introduced in 2012, was largely credited with stemming previously widespread smuggling, mostly to Ghana.
The price for farmers was fixed at 1,100 CFA francs for the current 2016-17 main crop harvest.
However, as stocks have piled up in warehouses and at farms, the few buyers continuing to purchase beans have ignored the official price and the Coffee and Cocoa Council, the Ivorian marketing board, has been powerless to enforce it.
"The number of motorcycles bringing cocoa into Ghana has greatly increased. The farmers still have cocoa from December on their hands. That's not normal," said Paul Ehouman, who farms near Niable, a town on the border with Ghana.
Growers and exporters said while it was clear trafficking had picked up it was not yet possible to estimate the total volume of cocoa beans involved.
Farmers in western Ivory Coast, the most productive cocoa region in the country, also reported an uptick in smuggling.
"Cocoa is heading to Guinea where they are buying beans for around 850 (CFA francs/kg) at best," said Yao Koffi, a farmer in the western region of Man.
The bulk of the trafficking was originating from areas along borders, and farmers further in said they had not yet seen evidence of the phenomenon.
"We don't see buyers on the ground, but if one makes you an offer of 600 or 500 francs, you give him you stocks without haggling," said Issa Kone, who farms outside the southwestern town of Issia. Reuters