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Côte d'Ivoire: Cocoa traders seek a better position on the export market

28/01/2021
Source : FACTIVA Agence Ecofin
Categories: Sectors

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In Côte d'Ivoire, concentration in the cocoa sector has had the effect of putting local exporters at a disadvantage in producing countries. They face fierce competition from transnational companies also operating in this segment.

In Côte d'Ivoire, the dominance of transnational companies in the external marketing of cocoa continues to exasperate national operators. The Ivorian Traders Group (GNI) in a letter dated January 22, called on the Coffee-Cocoa Council (CCC) to carry out reforms to improve the representation of local actors on the export market.

Indeed, the association points out, the current sales system is detrimental to national operators insofar as it favours international companies that have better access to financial resources and can make major purchases.

Currently, 6 companies namely Cargill, Touton, Olam, Barry Callebaut, Sucden and Ecom hold all cocoa export contracts and dominate bean purchases in the country.

According to the GNI, these companies are also the "exclusive representatives and suppliers" of chocolate manufacturers' beans, which constitutes a loss of opportunities for local players.

For the group, measures could be adopted by the CCC such as the imposition of chocolate makers such as Mars, Hershey or Ferrero to source from local actors and an immediate obligation for the 6 transnational companies to buy 20 to 30% of their cocoa from shredders.

More generally, this marginalization of local exporters is the result of a deep integration of international actors into the global cocoa chain even in producing countries to make economies of scale in transport.

The situation is even more delicate when some chocolatiers now operate directly or through their subsidiaries on the export market in order to reduce their costs.

Faced with this reality, many analysts point out that better access to finance will also be a key to enabling exporters to build capacity compared to foreign companies with lower costs of capital.

This could give them the opportunity to better bear the risks to cargo until it is shipped to the port of dispatch and to better manage the logistics of their supplies in the field.

As a reminder, the GNI was founded in 2015 and brings together 15 national companies whose purchasing and export capacities total 300,000 tons of cocoa per year.

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