Ivory Coast cocoa farmers and exporters believe the lower-than-expected price the world’s top exporter fixed for their beans this season could fuel smuggling to its neighbours, where the crop can fetch higher prices.
The West African nation raised the fixed farmgate price buyers must pay its cocoa farmers on Saturday by 11% to 1,000 CFA francs ($1.62) per kg for the main crop of the season, up from 900 CFA francs/kg last season.
But farmers, cocoa buyers, and exporters told Reuters that the increase was lower than expected given the steady rise of cocoa prices in the global market, and the sharp increase in farmgate prices in neighbouring countries.
“We have a difference of around $180 per tonne between the price in Ivory Coast and Ghana. It’s huge and it’s a factor that will accelerate the smuggling of Ivorian beans to Ghana this year,” said a trader from a European cocoa trading company who requested anonymity to speak candidly.
Cocoa futures have hit 46-year highs in recent weeks due to concerns over a supply squeeze in West Africa. Ghana, the world’s second biggest cocoa producer, hiked its 2023/2024 farmgate cocoa price by more than 63%.
“Smugglers are already buying cocoa (beans) in Ivory Coast at 1,000 F CFA/kg to send to Liberia and Guinea where they fetch 1,200 F CFA at the border,” said a director of an international cocoa export company, who also requested anonymity.
“I don’t know how we are going to be competitive with this price in San Pedro.”
Four exporters based in Abidjan and San Pedro and five cocoa buyers in Duekoue and Man in the west of the country estimated that around 120,000 tonnes of cocoa was smuggled from Ivory Coast into Guinea and Liberia last season.
The Ivory Coast Cocoa and Coffee Council (CCC) regulator said last week it had seized 40 tonnes of cocoa, the main ingredient in chocolate, in the Man region that was about to be transported to a neighbouring country.
CCC CEO Yves Brahima Kone has promised to intensify the fight against the smuggling of Ivorian beans to neighbouring states this season.
“The smuggling is a concern to us. I ask all those involved in the sector to be vigilant and to denounce smugglers,” he said on Saturday.
Source: norvanreports