Ivory Coast tightens regulation of world's leading cocoa sector

 

Reports say Ivory Coast's government has introduced stricter regulation of its world-leading cocoa sector for the 2014/15 season as it reasserts its control following a decade of liberalisation.

The government abandoned a system of spot buying in the 2012/13 season, selling forward its anticipated crop in order to fix a guaranteed minimum price for farmers and encourage investment in ageing plantations.

The reforms, which also included stricter quality standards, have largely won the government praise for raising farmer incomes and improving the reputation of Ivorian cocoa. Some exporters were quick to criticise the new regulations, however, claiming they were overly restrictive and risked cutting into their profit margins.

Under the new measures contained in a memorandum sent to exporters and merchants by the Coffee and Cocoa Council last week, exporters are limited to 110,000 tonnes of bean purchases during the October-to-March main crop harvest.

Of that, 70,000 tonnes will be permitted for the period from October to December and 40,000 tonnes from January to March. No restriction was placed on the volumes exporters may purchase during the April-to-September mid-crop, which generally produces smaller beans typically used for semi-refined cocoa products.

Under Ivory Coast's system of forward sales, exporters bid at auction on the right to export specific volumes of beans during a fixed time frame.