In the dusty town of Osseikro just inside Ghana’s border with Ivory Coast, the only billboard for kilometers welcomes visitors with the order: “Stop Smuggling Cocoa.”
However, the garish sign, put up by Ghana’s cocoa sector body during this year’s harvest, has done little to deter smuggling through a town which is a hotspot for the illicit trade.
“All of our cocoa is going to Ghana this year because of the prices,” said Eric Comoe, head of a cocoa-growers cooperative in the Ivorian town of Abengourou, 30km over the border.
Photo: Reuters
“For the country, it’s a problem because when there’s smuggling they don’t get the tax, but for the farmers it’s good,” he said.
West Africa accounts for nearly three-quarters of world cocoa output and Ivory Coast and Ghana are the No. 1 and No. 2 producers of the main ingredient of chocolate.
The smuggling is a problem because it deprives Ivory Coast of much-needed revenues as it seeks to rebuild after last year’s civil war and also skews the production data on which the cocoa industry’s investment decisions are based.
While it has always gone on, smuggling spiked during the four-month conflict last year as holdups at Ivory Coast’s two main ports prompted many farmers to funnel beans through Ghana to the east and north to Burkina Faso en route to port in Togo.
Industry estimates put the real size of last year’s harvest in Ivory Coast at about 1.7 million tonnes against the 1.5 million tonnes that were officially declared — suggesting about 200,000 tonnes were smuggled out unrecorded.
Yet even with the war over, the higher prices for cocoa in Ghana mean exporters and analysts forecast up to 145,000 tonnes of Ivory Coast’s crop will be smuggled out to the country, and to a lesser extent to Guinea and Liberia, by the end of next month.
A reform of the Ivorian sector to ensure price guarantees for its farmers might over time change that, but for now, farmers in its eastern region get an average of between 700 and 750 CFA francs (US$1.40 to US$1.50) a kilo compared with Ghana’s set price of about 1,000 CFA.
“The price premium in Ghana was almost US$900 per tonne at the start of the season, but more recently has been close to US$500 per tonne,” said one commodities fund manager, adding that the premium remained despite a recent increase in Ivorian prices.
Four trucks brimming with cocoa beans stood confiscated outside the deserted customs office in Abengourou last Sunday.
During a brazen attempt to cross into Ghana at the official border crossing in January, the trucks were stopped by customs, local cocoa dealers said.
This followed the Ivorian government move to step up its efforts to catch smugglers by deploying dozens of extra border patrol agents to eastern cocoa-growing towns late in December last year.
Local dealers said that while the capture of the four trucks had made smugglers more careful, it had not stopped the activity.
“Comparing the number of lorries they pick up and the number that go through, it’s no comparison,” Comoe said.
Customs officials who spoke on the condition of anonymity said they were insufficiently resourced to tackle the problem.
“We don’t have cars or communication systems,” an Ivory Coast customs official said.
The Ivory Coast cocoa body CGFCC was not available to comment.
Much of the illegal cocoa trade happens away from the official border crossing in the bush on narrow dirt tracks, easily navigated by motorbike, local dealers said.
Trucks move the cocoa to nearby the border and then motorbikes carry about three 60kg bags at a time via these tracks into Ghana, where it is re-bagged as Ghanaian cocoa.
Given the border regions share similar soil and weather, the beans should in theory be similar. However, Ghanaian cocoa officials insist their beans benefit from better handling, fertilization and crop spraying and so are far superior to Ivory Coast beans. Ivorian farmers disagree, saying they are capable of growing cocoa that is indistinguishable from Ghana’s.
As part of its planned cocoa industry reforms, Ivory Coast plans to reintroduce stabilized prices next season, to shield local farmers from price swings and to combat smuggling.
However, even then it is not expected that Ivory Coast and Ghana will set identical prices and any gap will still provide an incentive for smuggling.
Ivory Coast’s cocoa reform aims to give farmers between 50 percent and 60 percent of the so-called CIF (Cost, Insurance and Freight) export price, while Ghana sets prices with the aim of giving farmers up to 70 percent of the CIF price.
Exporters estimate that if you take the Ivorian government proposal of giving farmers 50 to 60 percent of the price, the farmer is still not going to get much more than between 600 and 700 CFA, based on current prices.
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