Ivory Coast bans some cocoa sales in another threat to market
Top cocoa producer Ivory Coast has taken steps to shore up scarce supplies for local processors, threatening to restrict bean exports and further tighten the global market.
A huge shortage this season forced the country’s regulator to postpone contracts from the main crop that ended in March to the smaller of two annual harvests, which runs through September. But that so-called mid-crop is usually reserved for local factories that grind cocoa into products used in confectionery, so there’s been competition for beans between local processors and shippers.
Because of that, local grinders complained to the government about difficulties in securing supplies, according to people familiar with the matter who asked not to be identified. So now the regulator is telling companies and exporters that don’t have processing facilities in the country that they can’t buy beans from the mid-crop, at least until the end of this month, the people said.
A spokeswoman at regulator Le Conseil du Cafe-Cacao, known as the CCC, didn’t respond to phone calls and a text message seeking comment.
Ivorian cocoa exports are running well behind last season’s pace, and restrictions could further exacerbate a global supply crunch that sent prices soaring to a record this year. It also leaves exporters exposed to a greater risk of defaults on contracts with their customers if they can’t secure beans.
Domestic processors are crucial to Ivory Coast’s target to grind at least half of its annual cocoa production, and have in recent years invested in new facilities or expanding existing ones. That’s partly why securing enough beans has often been a hot topic for local companies.
The country has in the past restricted cocoa purchases by multinational traders. Last year it blocked some companies from buying more as part of efforts to help other shippers source enough beans.
