Top cocoa grower Ivory Coast's market regulator warned exporters on Tuesday against paying above the mandated price for beans delivered to their facilities at the country's ports, threatening offenders with fines and the loss of their licenses.
In the same memorandum, the Coffee and Cocoa Council also
warned cooperatives and up-country buyers against holding onto beans, stating
that they were required to sell on their stocks to exporters within 21 days of
acquiring them.
Ivory Coast and number two producer Ghana are in the midst
of their worst harvest in years, with Ivorian arrivals estimated to be down by
more than 28% on last season.
The resulting scarcity of supply has pushed up prices in
London and New York to record levels.
"This situation has led to a frantic race to buy
beans," the Coffee and Cocoa Council (CCC) said in a memorandum
distributed to industry players. "It has recently been observed that
licensed exporters are overpaying for cocoa."
While farmers are allowed to earn above a minimum price set
by the CCC, prices along the rest of the cocoa supply chain are fixed and
overpaying is forbidden.
"The multinationals have been very aggressive,"
the director of a European exporter told Reuters. "The grinders pay up to
1,500 CFA francs ($2.51) per kilogramme, whereas we're authorised to pay a
maximum of 1,095 CFA francs."
The CCC also warned cooperatives and up-country buyers
against holding onto beans, saying they were required to sell on their stocks
to exporters within 21 days of acquiring them.
"Non-respect of this measure exposes the offender to
the confiscation of stocks and the suspension of access to the purchasing
system," the CCC wrote.
Cooperatives and buyers often hoard beans in anticipation of
an increase in the CCC mandated price scale.
Sources within the regulator told Reuters last week that
despite record-high global cocoa prices it would keep its price scale unchanged
for the mid-crop harvest due to open next month.
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