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Ivory Coast’s CCC suspends cooperatives for hoarding cocoa beans

Ivory Coast’s CCC suspends cooperatives for hoarding cocoa beans

Ivory Coast’s Coffee and Cocoa Council (CCC) has suspended around 40 cooperatives they suspect were illegally hoarding cocoa beans in order to sell them at a higher price to exporters struggling to fulfil their contracts.

This was revealed to Reuters by two sources at the regulator said on Friday.

Exporters, who have been short of supply due to cocoa disease and adverse weather, are looking for ways to buy beans to honour their contractual obligations and some suppliers were taking advantage of the situation, the sources said.

Suspended cooperatives and independent buyers have stockpiled more than 60,000 metric tons of cocoa since the start of the mid-crop in early April, the sources from the CCC said.

READ ALSO: US president tells Tinubu cocoa can solve Nigeria’s economic problems

While it is not illegal to stockpile beans, it is illegal to stockpile to charge higher prices.

The suspension, ordered last week to block trading by some cooperatives and this week for others, is intended to prevent overpayment by smaller exporters who are trying to compete with multinational cocoa buyers.

While the farmgate price was set at 1,500 CFA francs ($2.50) per kg for the period between April to September, some cooperatives and other buyers were requesting multinationals pay between 1,600 and 1,800 CFA francs at the ports of Abidjan and San Pedro.

“We were forced to react vigorously and suspend around 40 cooperatives and buyers to put an end to this practice, which is destabilizing the domestic marketing system and putting some exporters in difficulty,” said one of the CCC sources. Both requested anonymity because they are not authorised to speak to the media.

Exporters welcomed the regulator’s decision and said if beans were not being stockpiled, weekly arrivals would be much higher than what they have been recording since the start of the mid-crop.

Cocoa arrivals at the ports in the world’s top producer of the main ingredient in chocolate, are down 29.3% compared with the same period last year.

READ ALSO: Ghana borrows about $200m from cocoa traders to plug funding gap

“Two of my suppliers are part of the suspended cooperatives. They offered me cocoa at 1700 CFA francs per kg last Thursday and this Monday. I didn’t accept,” a manager of an export company based in Abidjan, also revealed. He also requested anonymity, Reuters said.

“This has to stop. There isn’t enough cocoa this year, so we must avoid complicating the already complicated situation,” said another San Pedro-based cocoa exporter.

The two sources at the CCC said that the regulator was carrying out an inventory of stocks.

“Cooperatives and buyers with delivery contracts will have to deliver quickly, otherwise we will direct them to other exporters ourselves,” one of the sources at the cocoa regulator said.

A Lagos-based Nigerian lawyer, Nathaniel Olijeh, commended the CCC and Ivory Coast’s government for waking up to their duties, and urged the government in Nigeria to emulate the “kind of sense of responsibility that its counterpart in Ivory Coast has exhibited in this respect.”

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