Ivory Coast cocoa traders take issue with major contracts as prices surge

Olam

17/02/2025 12:27

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      International prices have hit record highs
    

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      Regulator, Barry Callebaut not immediately available to
comment
    

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      Singapore trader Olam could also be affected
    

  
    By Ange Aboa
       ABIDJAN, Feb 17 (Reuters) - Ivory Coast cocoa traders
are seeking to reallocate fixed-price contracts with big buyers,
including Swiss chocolate maker Barry Callebaut  BARN.S , as a
surge in bean prices has left them at risk of selling at a loss,
their trade association said.
    The West African country is the world's leading cocoa
producer, but unfavourable weather has hit production, pushing
cocoa prices above the guaranteed price for exporters and
grinders that the Coffee and Cocoa Council (CCC) sets.
    International prices have hit record highs and demand for
cocoa is strong, meaning it should be relatively easy to find
other multinationals to take on contracts.
    Neither the regulator CCC nor Barry Callebaut immediately
responded to a request for comment.
    An official from the domestic trade association GNI said
Barry Callebaut was refusing to pay more than the CCC price,
meaning the traders could not afford to fulfil contracts to
supply it with 45,000 metric tons of cocoa.
    Speaking on condition of anonymity, the official said the
traders had had no choice but to overpay to secure the beans.
    Although CCC rules forbid overpayment, high global prices
and lower cocoa volumes meant most exporters paid extra last
season and the regulator has tended to overlook the practice.
    A Barry Callebaut manager, who did not wish to be named,
said in January the company had slowed its purchases since
mid-December because of high prices.
    While the CCC has set the price for exporters and grinders
at 1,915 CFA francs ($3.07) per kilogram, suppliers are asking
traders to pay between 2,100 and 2,200 CFA francs, cocoa
exporters, buyers and cooperatives said.
    At a meeting last week, GNI members agreed to ask the CCC to
reassign outstanding export contracts that had been agreed with
Singapore-based trader Olam  OLAG.SI  as well as with Barry
Callebaut, the GNI official said.
    The Olam contracts that GNI members want to be reallocated
cover sales of 20,000 tons, according to an Olam official, who
also spoke on condition of anonymity.
    The person said Olam had always honoured its contractual
commitments and will continue to do so, adding: "We pay for
cocoa at the price guaranteed by the CCC." 
    Olam also did not immediately respond to a request for
comment.
($1 = 623.0000 CFA francs)

 (Editing by Alessandra Prentice, Portia Crowe and Barbara
Lewis)
 ((Anait.Miridzhanian@thomsonreuters.com;))