Ghana Farmers Begin Watch for Smuggled Ivory Coast Cocoa Beans
February 01, 2011, 8:40 AM ESTFeb. 1 (Bloomberg) -- Ghana's cocoa farmers have started monitoring the lengthy border between the world's top two cocoa producers as a ban on exports of beans from neighboring Ivory Coast raises concern over smuggling of the chocolate ingredient.
"It is very likely that Ivorian farmers may want to bring in the beans," said John Mensah, acting chief farmer in the south of Ghana's Western region, which produces 54 percent of the country's beans, said by phone from Enchi. "If they become seriously in need of money to survive, they will definitely look to Ghana."
The political stalemate in Ivory Coast entered its third month as Laurent Gbagbo, the incumbent president who has ruled for a decade, refuses to cede power to Alassane Ouattara, the internationally recognized winner of the Nov. 28 presidential vote. Ouattara told exporters to halt shipments of cocoa and coffee until Feb. 23, in a bid to cut off funds to his rival.
"Some poor farmers that live near the border and have no other means of livelihood should want to sell the beans to nearby Ghanaian buyers," Nana Adjei Damoah, deputy president of the Ghana Cocoa, Coffee and Sheanut Farmers Association, said in a phone interview Jan. 28. There haven't been any reports of smuggling along the 668 kilometer (415 mile) border, he said.
Alhaji Mohammed Mumuni, Ghana's foreign affairs minister, said Ivory Coast's illegal cocoa could affect the quality of Ghanaian beans.
"If there are restrictions on the Ivory Coast, it's likely that smuggling that has been going on along our border will intensify and therefore you will have more Ivorian cocoa coming into Ghana," he said in an interview in Addis Ababa, Ethiopia, Jan. 28. "It will contaminate our cocoa."
Mensah, who harvested about 500 bags on his farm this season, said he visited border communities last week and didn't hear of reports of smuggling yet. Farmers have formed groups to monitor the frontier, he added.
"Government is very serious about this so farmers are not taking it lightly at all," he said.
The post-election crisis reversed the tide of smuggled West African beans. In the 2009-10 harvest, Ghana lost as much as 100,000 metric tons of cocoa in illegal shipments to Ivory Coast, as farmers sought higher prices than could be fetched in the local market, where rates are fixed at the start of the season.
An increase in that price by a third, to 3,200 cedis ($2,043) per ton, at the beginning of the harvest in October helped halt the trade, Mensah said.
The Ghana Cocoa Board, which oversees the industry, hasn't recorded any smuggling cases of Ivorian beans into Ghana, said Noah Amenyah, a spokesman. After Ouattara's export ban started, the Accra-based board worked with security forces to increase border patrols, he said.
The Ivorian crisis sparked a rally in the international price of cocoa, with March-delivery beans climbing 16 percent on the NYSE Liffe exchange in London. The beans shed 18 pounds, or 0.8 percent, to 2,167 per ton by 12:58 p.m.
Ghana has already purchased more beans so far in the 2010- 11 crop than it did in the previous season, Amenyah said. Purchases from farmers reached 643,000 tons in the 15 weeks to Jan. 13, compared with 632,000 tons that purchased last year. Better weather, improved farming, and stemming smuggling are credited with the boost.
--Editors: Emily Bowers, Karl Maier.
To contact reporter on this story: Moses Dzawu in Accra at mdzawu@bloomberg.net.
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.
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