Cocoa exporters seek changes to Ivory Coast reform

Tue Jan 3, 2012 5:35pm GMT

 

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* Object to uniform transport fee for cocoa beans

* Further negotiations scheduled for coming weeks

By Ange Aboa

ABIDJAN, Jan 3 (Reuters) - Leading cocoa exporters want changes to the pricing scale used in Ivory Coast's reform of the sector before they will take part in bean auctions by the world's top grower due to start later this month, export officials said on Tuesday.

President Alassane Ouattara's government intends to roll back a decade of liberalisation and adopt greater regulation as part of a move to guarantee that local farmers get at least 60 percent of the export price of their produce.

Around 70-80 percent of next season's crop is due to be sold at daily auctions which, according to a government document seen by Reuters last month, are scheduled to start this month.

However, several exporters contacted by Reuters said existing reform proposals misrepresented the real cost of transporting beans from plantations to the ports of Abidjan and San Pedro and that they were seeking revisions.

"The CGFCC (sector body) told us in one of our discussions that the messaging system for the auctions would be ready by mid-January. We insisted discussions on the pricing scale be finished before that, otherwise we are not taking part in the sales," said the head of an international export house with offices in Abidjan.

The current reform draft fixes at 15 CFA francs ($0.03) per kilo the cost of transporting beans from anywhere in Ivory Coast to factory or port. Some industry officials insist the real cost depends on the distance over which they are being carried.

"For example, if I buy more cocoa from Man, Duekoue and Guiglo which are at least 500 km (300 miles) from Abidjan, the cost will be set at 15 CFA francs - the same as if I had received cocoa from Agboville just 60 km just outside Abidjan," said the managing director of one European exporter.

"That's not fair and that is what we object to."

The first export official said further negotiations were scheduled for coming weeks.

Completion of the reform is a pre-condition for Ivory Coast to secure debt relief backed by the International Monetary Fund.

The forward sales were initially due to start in October but were delayed for industry consultations.

Market analysts say the precise impact of the reform on the market is hard to predict but there is consensus among cocoa dealers that the changes could also impact the timing and concentration of hedging pressure on the futures markets. (Writing by Mark John; editing by James Jukwey)

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