Drop in currency spurs cocoa smuggling
Fin24/ Reuters - Jan 13th 2014, 08:04
Abidjan - Smugglers have trafficked around 40 000 tons of Ghanaian cocoa beans into top grower Ivory Coast since November to take advantage of a drop in Ghana's cedi currency, exporters and merchants say.
Cocoa smuggling between the two countries is common, but over the past decade it has mainly involved Ivorian beans being taken illegally to Ghana, the world's second largest producer, where the government buys output at a fixed price.
However, Ivory Coast abandoned a decade of sector liberalisation last season and introduced a minimum price for farmers - a measure that has helped to reduce illicit exports.
Exporters say the Ivorian price is now seen as more attractive by Ghanaian farmers, who can make bigger profits selling their output to smugglers.
While the volumes of beans being smuggled into Ivory Coast currently represent only a fraction of total output, Ghana risks losing millions of dollars in cocoa revenues if it fails to stabilise its struggling currency.
"We estimate everything that has come in (from Ghana) at 40 000 tonnes at least," says the purchasing manager of an Abidjan-based exporter.
Two other exporters estimated volumes smuggled from Ghana at between 30 000 and over 40 000 tons.
"It is possible and probably more. Exchange rate differentials make Ivory Coast's price lucrative," says a leading Ghanaian cocoa buyer in Accra.
A senior official with Ghana's marketing board, Cocobod, said that the regulator was aware of reports of smuggling.
"We are investigating," the official said.From Fin24.com
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