Côte d’Ivoire restricts cocoa bean purchases for major traders as cap reached
Port arrivals have slowed as the world’s top cocoa producer heads towards the end of its October-to-March main crop, raising concern that exporters might default on their contracts because of tight supply
Cote d’Ivoire’s cocoa regulator has restricted 20 major traders, including Cargill and Barry Callebaut, from purchasing beans for export after they reached their buying limits, the head of the Coffee and Cocoa Council (CCC) said on Thursday.
Port arrivals have slowed as the world’s top cocoa producer heads towards the end of its October-to-March main crop, raising concern that exporters might default on their contracts because of tight supply.
The CCC refuted this on Monday but said measures would be implemented to limit extra purchases and stock-building by some exporters while others struggled to meet their requirements.
“We have informed 20 exporters who reached their purchasing limits for the main crop that we have closed registration for them,” the CCC head, Yves Brahima Koné, told Reuters by phone.
The traders concerned include the giants Cargill Inc and Barry Callebaut, as well smaller local companies, Koné said.
He explained the CCC was activating a limit on extra cocoa bean purchases set up during a 2012 reform to protect smaller exporters from multinationals.
Barry Callebaut said it had been able to fulfil its normal buying patterns and that factories in Côte d’Ivoire were running as per usual.
“We remain in constructive dialogue with CCC and will resume our normal buying pattern as soon as the temporary measures are lifted,” spokesperson Frank Keidel told Reuters via email.
Cargill did not immediately respond to a request for comment.
Yields down
The two companies are the biggest buyers of Ivorian beans and also the largest cocoa grinders in the West African country.
Industry sources said the purchasing limit would allow smaller local exporters to honour their commitments.
However, an unnamed local exporter said the measure may still not be enough.
“The truth is that there is no longer enough cocoa for everyone,” he told Reuters.
Main crop yields have been lower than usual this season due to months of below-average rainfall and poor weather conditions.
Koné said the shortages were unexpected but gave his assurance that the CCC had pre-sold beans with a sufficient security margin to avoid defaults.
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