Ivory Coast’s cocoa regulator forecast the nation may lose a fifth of its cocoa crop to smuggling during the next harvest if neighboring Ghana refuses to cut payments to farmers after international prices fell, according to a person familiar with the matter.
The prediction by Le Conseil du Cafe-Cacao comes after the world’s biggest cocoa producer cut farmers’ pay by 36 percent to the equivalent of about 700,000 CFA francs ($1,251) per metric ton in April to cope with global prices that dropped more than a third in a year on expectations of oversupply. Ghana, the second-biggest grower, has kept farmer payments at the equivalent of 7,600 cedis ($1,708) per ton since October and has ruled out any cuts for the main harvest that starts next month. Cocoa is harvested twice a year in West Africa.
The Ivorian regulator expects losses of as much as 400,000 tons of cocoa next season, said the person, who asked not to be identified because he’s not authorized to speak publicly about the matter. One of the nation’s biggest exporters has a similar forecast, according to a separate person familiar with the matter.
Ivory Coast President Alassane Ouattara conveyed his concern about the pay discrepancy to his Ghanaian counterpart, Nana Akufo-Addo, according to two other people familiar with the matter. The two countries agreed in May to cooperate on plans to counter volatile prices and officials of their regulators were locked in talks about the partnership at a meeting on Wednesday and Thursday in Ghana’s capital, Accra. Read the full story here.