Excluded from certified cocoa contracts: Ivorian traders sound alarm bells

Crushed by the stranglehold of the multinationals that take over (almost) all the contracts of the big chocolate manufacturers, the Ivorian traders appeal for help and take the regulatory authority as a witness.

The communiqué issued by the Groupement des négociants ivoiriens (GNI) on 24 February sounded like a distress call. In its note, the association warned that « Ivorian processors and exporters are going bankrupt because of the premiums on certified sustainable cocoa beans, which only international companies based in Côte d’Ivoire benefit from ». At the heart of the problem is the award – by the major chocolate companies (Mars, Nestlé, Cémoi, Mondelez…) – of certified cocoa contracts whereby the Western chocolate majors pay a premium of 200 dollars per tonne of cocoa beans to obtain certified production in accordance with fair trade rules. A juicy market – 45% of the Ivorian cocoa harvest – from which Ivorian operators in the sector feel excluded, these « certified » contracts being captured almost entirely by a handful of foreign groups present in the territory (Cargill, Olam, Sucden, Barry Callebault…). In the aforementioned bulletin, the GNI estimates that ’97 % of these premiums are […] granted to seven multinationals established in Côte d’Ivoire, with which Ivorian processors and exporters are in competition’. Worse, « the result is that not only are Ivorian exporters and processors excluded from the certified market, but they can no longer even buy uncertified cocoa beans to ensure their survival », the GNI is concerned that « it is a fact that it is impossible in Côte d’Ivoire to buy ordinary cocoa beans without also buying certified cocoa ».

Bankruptcies

As a result, the spectre of chain bankruptcy now hangs over the Ivorian cocoa industry. Contacted by the Reuters agency, Constance Kouamé, the secretary general of the GNI, acknowledged that « eleven of [their] members (out of the fifteen members of the GNI, editor’s note) [were] on the verge of bankruptcy and non-payment […] ». This is in many ways similar to the serious crisis the industry faced in 2017. At the time, the Ivorian Coffee-Cocoa Council (CCC) lost 300 billion CFA francs ($500 million) when local exporters went bankrupt because they could not finance bean purchases to meet their export contracts.

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However, the situation may change. On 27 February, several sources surveyed by local media confirmed, on condition of anonymity, that multinational cocoa companies operating in Côte d’Ivoire had agreed, after talks with the GNI and the CCC, to sell to national traders 60,000 of the 150,000 tonnes needed to fulfil all their export contracts. A first step that could be followed by others…