Finance

The Ivorian grinders and shippers launches a distress call to chocolate makers 

Tuesday, 25 February 2020 10:27
The Ivorian grinders and shippers launches a distress call to chocolate makers 

(GNI) - While the Gni congratulates the chocolate makers and the chocolate industry for their will to support Ivorian farmers, the Group of Ivorian traders (Gni), Ivorian grinders and shippers call for help and launche a distress call to all chocolate makers, such as Lindt, Mars, Mondelez, Meiji co, Ferrero, Nestle, Blommer, Hershey, Ezaki Glico, Arcor, Pladis, Kellogg’s, Storck, Orion, United confectionary manufacturers, Bourbon, chocolat Frey, Cemoi, Valrhona, Toms, and all other chocolate makers. Ivorian grinders and shippers are going out of business, because of the premiums paid for certified sustainable cocoa beans, which only international companies installed in Ivory Coast benefit from.

The Gni invites the chocolate industry to give certified sustainable cocoa beans contracts not only to international companies installed in Ivory Coast, but also to Ivorian grinders and shippers who have networks of certified coops and for some of them, a strong will to invest in certification programs.

Today 45 percent of the Ivorian production is certified sustainable and is therefore subject to significant premiums paid over the stabilised price, by international companies Installed in Ivory Coast and ranging from USD 70 to 200 per ton.

Those premiums for certified sustainable cocoa beans are given exclusively at 97 percent to the 7 multinationals installed in Ivory Coast, and with which the Ivorian grinders and shippers are competing.

As a consequence, the Ivorian grinders and shippers are not only excluded from the sustainable cocoa beans market which is now almost half of the production, but also, they can’t buy anymore NON certified cocoa beans (also called ordinary cocoa beans) in order to survive. 

Each intermediary between farmers and all grinders/shippers, called local suppliers (traitants or coops) asks a premium for certified cocoa beans as a condition to also deliver NON certified cocoa beans. It is an established fact in the industry that it is impossible in Ivory Coast to buy ordinary cocoa beans without buying certified sustainable cocoa beans.

As a result, it is difficult for the Ivorian grinders and shippers to buy the physical cocoa beans to cover their deblocage contracts. They can only stop their activity hoping to maybe recover their up country pre financing lost in the bush, as they can’t pay premiums to local suppliers as international companies do. Recently Sucso, one of the main Ivorian grinders, went out business for this reason.

This is even more of a problem, when such as this current crop, the futures market price goes during the crop, well over the equivalent futures price of the stabilised price (fixed before the crop at a lower futures price). In such a situation, there is more trading appetite for beans to be shipped out of Ivory Coast.

Finally, the current allocation of the certified sustainable contracts in Ivory coast to only the international companies, not only dictates the internal commercial flow of both certified and NON certified sustainable beans to international companies, but it also threats the stabilisation system. It creates an important disparity between the  deblocage contracts owners without certified sustainable contracts, such as Ivorian grinders/shippers, and the equivalent physical NON certified cocoa beans in the hands of those who can pay premiums to get both certified and NON certified cocoa. 

The Gni and its 15 members are at the disposal of the chocolate makers to stop this crisis due to the indirect and unwanted effects of the certified cocoa beans contract  allocation.

General Secretariat

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