Côte d’Ivoire: A bitter season for the cocoa industry

Côte d’Ivoire, the world’s leading cocoa-producing country, began its interim marketing campaign for the 2022-2023 harvest on 1 April and ended it on 30 September.

For this period, the government is forecasting a harvest of 450,000tn, or even 500,000tn. This is a smaller volume than the 600,000tn harvested during the 2021-2022 interim campaign. As a result, there is no cause for celebration among the trade, and the usual enthusiasm demonstrated by cocoa growers at the start of the harvest is nowhere to be seen.

It is worth noting that the context of this intermediate cocoa season, known as the short season, is a special one. “This year, the graining is very high, and this has led to a discount of 75 CFA francs per kilo [$0.12 /kg], resulting in a loss of 33.7bn CFA francs. In reality, this is what had to be deducted from the overall amount,” said Kobenan Kouassi Adjoumani, the Ivorian agriculture minister.

Short season, small harvest

In general, the beans are small or of poorer quality during the short season, making them difficult to export. The harvest is therefore targeted primarily for local manufacturers to supply their factories.

Since 1 April, there have only been a small number of cocoa deliveries to the ports of San Pedro and Abidjan, particularly from the far western part of the country. However, operators are hoping that the rains will increase yields and enable production to peak in June and July – even if the quality problems inherent in the intermediate campaign remain.

The fact that a number of national players have fallen far behind on their purchases also makes this cocoa season unique. By the end of the main campaign on 31 March, many national companies had still not honoured all their contracts (several estimates put the volume of overdue contracts at 100,000tn of beans), and they have since approached the CCC to find a solution.

During the last main campaign (1 October 2022 – 31 March 2023), more than 1.8mt of beans were transported to the ports of San Pedro and Abidjan, according to forecasts. During this period, Ivorian traders experienced numerous supply difficulties due to a serious bean shortage and smuggling to neighbouring countries, such as Liberia and Guinea. Some multinationals are also suspected of having ‘retained’ part of the harvest through their relays in the production regions, then negotiating the free transfer of contracts from nationals to them.

‘No need for alarm’

The Conseil Café-Cacao (Coffee-Cocoa Council) has taken steps to control the situation. On 21 February, it stopped selling beans to around 20 players, including the multinationals Cargill, Barry Callebaut and Olam. In addition, a rule specific to the sector, prohibiting the storage of beans for more than 20 days in the warehouses of cooperatives and processing units, was activated – with possible financial penalties for offenders.

“We have done everything we can to ensure that both nationals and multinationals can obtain adequate supplies,” says Yves Brahima Koné, the CCC’s managing director. The CCC is a long way from the situation it experienced in 2016-2017, when many traders were unable to honour their contracts, leading to a serious crisis. This led to the dismissal of the CCC’s former management following an audit.

Today, the situation is very different. “We have a dashboard that we monitor regularly to take stock of contracts and physical purchases,” says Koné. Operators, many of whom are members of the Groupement des Négociants Ivoiriens (GNI), are hoping to have access to beans during the current intermediate season. However, supply remains difficult given the low levels of harvest.

Achi’s experts

The Ivorian government has therefore taken up the issue and is looking for solutions. In March, two specialists with in-depth knowledge of the cocoa trade were appointed to Prime Minister Patrick Achi’s office to look into the matter and find a satisfactory response to local players’ expectations. This move to beef up his team demonstrates how important the prime minister views this sector. However, to these experts  – Jean-Marie Delon, who previously worked for the giant Cargill, and Moustapha Konaté, formerly of Armajaro –  this does not inspire confidence among Ivorian traders.

“There is no hidden agenda to benefit the multinationals, nor is it a question of bypassing the CCC. The new consultants will support the government in making rapid decisions,” says someone close to the matter at the prime minister’s office. However much the prime minister’s office tries to provide assurances, doubts persist.

For its part, the CCC is keeping an eye on the situation and has no plans to penalise companies that fail to catch up on their purchases. Local traders will be given the opportunity to carry over their contracts to the next main campaign, which starts on 1 October. However, no formal decision has yet been taken.