KEY POINTS
- Ivory Coast seizes 33 trucks smuggling 1,100 tonnes of cocoa beans to Guinea.
- Global cocoa production deficit drives up prices and increases smuggling activity.
- Ivory Coast and Ghana raise farmgate prices to support cocoa farmers and stabilize the sector.
Ivory Coast’s Coffee and Cocoa Council (CCC) has confiscated 33 trucks carrying approximately 1,100 tonnes of cocoa beans being smuggled across the border into Guinea. This seizure comes as the region struggles with a decline in cocoa production, driven by poor harvests in both Ivory Coast and Ghana, the two largest cocoa-producing nations.
Rising Smuggling Amid Production Deficits
Cocoa smuggling has intensified across the region, as poor harvests have led to shortages in supply, contributing to a four-year global cocoa deficit. The CCC, in collaboration with military forces and industry stakeholders, intercepted the trucks in response to the illegal trade.
Confirming the seizures were buyers, exporters, and military sources, though they remain unnamed due to restrictions on public commentary.
The shortfall in cocoa production has driven up global cocoa and chocolate prices, putting pressure on local governments to regulate the sector more strictly. In Ivory Coast, the 2023/24 season saw a significant drop in production, with a 25 percent decline reported in West Africa, including Ivory Coast.
According to Reuters, this has led to tighter market conditions, increasing the temptation for smugglers to transport cocoa illegally across borders where prices may be more favorable.
Ivory Coast and Ghana Adjust Prices to Stabilize Market
To address the financial impact of falling production, Ivory Coast has raised the fixed farmgate price paid to cocoa farmers by 20 percent, to 1,800 CFA francs (approximately $3.09) per kilogram.
This price increase aims to boost incomes for cocoa farmers and help sustain the industry during a challenging production season. Ghana, which is also experiencing production issues, implemented a similar price increase earlier this year, raising its farmgate price by nearly 45 percent to 48,000 cedis per metric ton.
Both Ivory Coast and Ghana coordinate their farmgate prices in an effort to stabilize the market and ensure a fair income for cocoa farmers. Despite these efforts, the global cocoa deficit is projected to continue due to supply disruptions, exacerbated by smuggling and declining yields.
Curbing Smuggling and Market Disruptions
In September, Ivory Coast’s CCC announced measures to combat the hoarding of cocoa beans, issuing warnings to buyers and cooperatives about potential sanctions if they were found to be withholding beans in hopes of capitalizing on higher prices later in the season.
These moves are part of a broader strategy by West African nations to curb illegal activity and restore balance to the global cocoa market.
Cocoa arrivals at Ivorian ports were at 13,000 tonnes as of October 6, 2024, marking a 74 percent decline from the same period last year. The significant drop in arrivals is attributed to both the reduction in overall production and increased smuggling activities.
As authorities continue to enforce stricter regulations, further efforts are needed to prevent illegal trade and stabilize the market.
