Cooperatives that hoard beans are suspended by Ivory Coast’s cocoa regulator, according to sources

According to two sources within the regulator, the Coffee and Cocoa Council (CCC) of Ivory Coast has suspended some 40 cooperatives that they believe are unlawfully stockpiling cocoa beans in order to sell them to exporters who are having trouble meeting their contractual obligations for a higher price.

According to the reports, some suppliers were taking advantage of the situation as exporters, who have been short of supply owing to cocoa disease and unfavorable weather, were seeking for ways to buy beans in order to fulfill their contractual responsibilities.

Since the beginning of the mid-crop in early April, suspended cooperatives and independent purchasers have accumulated more than 60,000 metric tons of cocoa, according to CCC sources who spoke with Reuters.

Although hoarding beans is not against the law, hoarding beans with the intention of charging more is.

The suspension, which was imposed this week for certain cooperatives and last week for others, aims to stop smaller exporters from overpaying in an attempt to outbid international buyers of cocoa.

Multinational corporations were asked to pay between 1,600 and 1,800 CFA francs at the ports of Abidjan and San Pedro by certain cooperatives and other buyers, despite the fact that the farmgate price was fixed at 1,500 CFA francs ($2.50) per kilogram from April to September.

“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,” according to a source at the CCC. Since they are not authorized to speak with the media, they both asked to remain anonymous.

Exporters praised the regulator’s action and stated that weekly arrivals would be far higher than those they have been tracking since the beginning of the mid-crop if beans were not being hoarded.

Arrivals of cocoa at the ports in the leading producer of the component used in chocolate worldwide have decreased by 29.3% when compared to the same time previous year.

“My two suppliers are involved in the cooperatives that are suspended. They made me an offer to buy cocoa last Thursday and this Monday for 1700 CFA francs per kilogram. I declined,” an Abidjan-based export company manager told Reuters. He asked to remain anonymous as well.

“This needs to end. Another cocoa exporter from San Pedro stated, “We have to avoid making the already difficult situation more complicated because there isn’t enough cocoa this year.

According to the two CCC sources, the regulator was doing a stock inventory.

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

$1 is equal to 600,0000 CFA francs.