Ivory Coast: chocolate prices to rise if Ivory Coast stalemate remains
Hundreds of thousands of tonnes of raw cocoa are trapped in Ivory Coast and pressures on supplies could affect prices of Easter eggs if the country’s political crisis is not resolved.
An Ivorian farmer tends a husking machine for cocoa beans. More than 40 per cent of the world’s cocoa comes from the West African country Photo: ALAMY
By Mike Pflanz 5:06PM GMT 18 Feb 2011
International cocoa prices hit a one-year high on Thursday and have risen 14 per cent since international export embargoes were placed on the world’s largest exporter of the raw material that makes chocolate.
More than 40 per cent of the world’s cocoa comes from the West African country, where the sitting president, Laurent Gbagbo, has refused to step down after losing elections in November.
In a bid to cut off his access to foreign exchange, the EU and the US agreed to calls from Alassane Ouattara, recognised as the true winner of the polls, for an international ban on buying cocoa from Ivory Coast.
So far, the ploy has failed to shift the 66-year-old incumbent, and now traders and confectioners are warning that price rises could be passed on to consumers.
“If no cocoa is exported from Ivory Coast, it will only be a question of time before consuming countries run out of stocks,” said Isabelle Adam, secretary general of the European Cocoa Association.
Ivory Coast nationalises banks 18 Feb 2011
US importers have reported that they are running low on stocks, and warned of similar prices rises of roughly 3 per cent as followed earlier interruptions in supply.
A spokesman for Cadbury’s said that most Easter eggs would already have been manufactured and that the firm bought most its cocoa from Ghana not Ivory Coast.
Some 300,000 tonnes of unprocessed cocoa is currently sitting in warehouses and farmers’ stores across Ivory Coast.
Although cocoa does not rot quickly, it needs to be processed and energy supplies to operate factories have also been affected as the country runs short of foreign currency.
Francisco Redruello, an analyst at Euromonitor, said that supplies had so far not been drastically affected and the crop was finding its way to international markets, some of it smuggled through neighbouring Ghana, the world’s second largest cocoa exporter.
“Political instability in the region has failed so far to impact cocoa bean deliveries to processors, despite the uncertainty it has recently caused among traders,” he said.
Nevertheless, farmers staged demonstrations outside the EU offices in Ivory Coast’s main city, Abidjan, on Thursday to protest at the ban, which they said is denying poor people income while failing to unseat Mr Gbagbo.
More than six million Ivorians, almost a third of the population, are directly or indirectly dependent on cocoa for their livelihood and the export ban was hitting them hardest, added Mrs Adam.
Cocoa beans were selling on Friday at £2,193 a tonne, compared to £1,879 in the month before the November 28 elections.