Ghana’s cocoa regulator is warning farmers that the smuggling of beans from neighbouring Ivory Coast may jeopardise efforts to keep producer payments unchanged despite a slump in prices.
According to Bloomberg, the regulator in Ivory Coast, the world’s biggest producer, expects that as much as 70,000 metric tons of the country’s crop will be smuggled across its borders by the time the season ends in September, a person familiar with the matter said July 5.
Ivory Coast cut farmers’ pay by 36 percent to the equivalent of about 700,000 CFA francs ($1,211) per ton in April to cope with prices that have fallen by more than a third in a year on forecasts of an oversupply. Ghana, the second-biggest grower, kept farmer payments at the equivalent of 7,600 cedis ($1,723) per ton since October and has ruled out any cuts for the next harvest.
“If farmers want to continue to enjoy the privilege of high prices even at such times, then we must stop all forms of smuggling,” said Johnson Mensah, a director of the Ghana Cocoa Board who also farms in the western town of Enchi, near the Ivorian border. “When we do that we enrich other people with our country’s money,” he said by phone.
Chief farmers in border towns with Ivory Coast have started campaigns to curb smuggling, Mensah said.
Cocoa futures rose 0.1 percent to 1,493 pounds ($1,937) at 1:14 p.m in London, paring this year’s losses to 14 percent. Ivory Coast’s cocoa regulator, Le Conseil du Cafe Cacao, forecasts its crop for the year through September to increase to 1.91 million tons, according to the person familiar, while Ghana expects its harvest to rise as much as 16 percent to 900,000 tons.