Breaking News
Black Friday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Ivory Coast caps local firms' share of cocoa exports, say sources

CommoditiesOct 07, 2021 03:33PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: A farmer prepares to collect a cocoa pod at a cocoa farm in Alepe, Ivory Coast December 7, 2020. REUTERS/Luc Gnago/File Photo

By Ange Aboa

ABIDJAN (Reuters) - Ivory Coast's cocoa board will allocate a maximum of 200,000 tonnes of cocoa to local exporters this season, half as much as envisaged under a government decree to boost local firms' competitiveness, five industry sources told Reuters on Thursday.

In May, the government ruled that 20% of cocoa purchases by multinational companies in Ivory Coast should be fulfilled by local firms in an effort to improve competition in the world's largest cocoa-exporting economy.

This share would have represented more than 400,000 tonnes of beans in the 2021/22 season. But the Cocoa and Coffee Council (CCC) regulator has found it cannot be fully implemented as local exporters do not have the financial or logistical capacity to handle that volume, two sources at CCC said.

"We have started to allocate the volumes of international contracts to local exporters but we realise that they cannot export the 20% that the government has decided to give them," one of the sources said.

Speaking on condition of anonymity, three local firms said the CCC had informed them local exporters' share would be capped at 200,000 tonnes.

The decree was meant to change the status quo where major international players use their greater financial muscle to buy and export all available cocoa, while local firms lack access to financing and foreign chocolate makers to compete.

But banks are still wary of financing local exporters even when international contracts are guaranteed, according to the CCC sources and two banking sector sources.

For banks, the main risk lies in the weakness of the supply chain of many local exporters that must be able to secure the necessary volumes in the bush.

"These exporters represent too great a risk for us. They have no collateral and we are not sure that they will be able to buy the cocoa even if we give them the money," said the credit manager of one of the largest banks financing the cocoa sector.

Another banker said an expected drop in cocoa production this season had raised fears of stiff competition on the ground for beans, which will disadvantage small exporters.

"Under these conditions the small ones are a risk for us," the source said.

As a result, the CCC may reallocate international contracts from some local exporters, a third CCC source said.

"We can't risk local exporters defaulting so we are studying the possibility of cancelling the contracts of those who do not have financing and giving them to those who have financing," the source said.

Ivory Coast caps local firms' share of cocoa exports, say sources

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email