In Ivory Coast, the country’s market regulator is cracking down on cocoa exporters who are paying more than the allowed price for cocoa beans. The Coffee and Cocoa Council (CCC) has warned these exporters that they could face fines or even lose their licenses if they continue to overpay for the beans.
Ivory Coast and Ghana, the world’s top two cocoa producers, are experiencing their worst cocoa harvest in years. This has led to a shortage of cocoa beans, causing prices in London and New York to reach record highs. As a result, exporters and cocoa companies are in a frenzy to buy as many beans as possible, even if it means paying more than the CCC’s set prices.
Rules on Cocoa Payments
While cocoa farmers in Ivory Coast can earn above the minimum price set by the CCC, the prices for the rest of the cocoa supply chain are fixed. This means that exporters and other companies are not allowed to pay more than the CCC’s set prices for the beans.
According to the director of a European exporter, some multinational companies have been very aggressive in their efforts to secure cocoa beans. They are reportedly paying up to 1,500 CFA francs (about $2.51) per kilogram of cocoa, even though the authorized maximum price is only 1,095 CFA francs.
Crackdown on Hoarding
The CCC is also warning cocoa cooperatives and up-country buyers against hoarding cocoa beans. These groups are required to sell their stocks of beans to exporters within 21 days of acquiring them. If they fail to do so, they risk having their stocks confiscated and being suspended from the purchasing system.
Cooperatives and buyers often hoard cocoa beans in anticipation of the CCC raising the mandated price scale. However, with the current shortage of beans and the resulting high prices, the CCC is determined to ensure that the cocoa supply chain runs smoothly and that all players follow the rules.
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