(Bloomberg) -- Members of an Ivory Coast traders’ group have complained that some major exporters in the world’s top grower are overpaying for cocoa beans to secure supplies for their processing plants, according to sources familiar with the matter.
Companies are adding an extra 20 CFA francs (3 US cents) per kilogram to ensure stocks, the people said. That represents about a 1% markup to the state-set factory-gate price that the government recently announced. The situation is worrying domestic traders who fear that they will not have enough beans to fulfill their export contracts.
The Ivorian group, also known as GNI by its French acronym, accounts for 30% of the country’s cocoa trade. It’s taken its concerns to the industry regulator Le Conseil Cafe-Cacao, which prohibits overpaying for beans and started cracking down on the practice earlier this year.
A representative for Gepex, an international exporters group, didn’t respond to a request for comment.
The main-crop harvest has just begun in Ivory Coast, but global supplies remain tight after poor production in West Africa last season and benchmark New York futures have soared about 75% higher so far this year. Despite the 20% hike in this season’s farmgate price, the country’s growers haven’t benefited from the global rally.
Traders are supposed to secure beans by purchasing at the price set by the government to meet volumes agreed in contracts with the CCC. After three back-to-back seasons supply shortfalls, exporters are ready to pay more to ensure adequate supplies.
GNI’s spokesperson did not respond to phone calls and a text message seeking comment. The CCC’s spokesperson declined to comment.
Many GNI members were unable to meet all their export contracts last year because of tight supplies, the people said. According to CCC data published on its website on Oct. 15, 91.97% of all cocoa contracts were executed during the 2023-2024 season. Based on the ICCO’s production estimate of 1.8 million tons, contracts worth about 140,000 tons were likely not met in the last season.
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