Ivory Coast's cocoa regulator has suspended purchase and export of cocoa beans for the month of June, sources said on Thursday, in a bid to retain sufficient stock for local grinders to keep their factories running.
The decision to temporarily close purchases and exports was made to avoid shutting processing plants that had run out of stocks due to lower cocoa production, and to increase local grinding, an official from the Coffee and Cocoa Council (CCC) told Reuters.
"We no longer had any stocks, and it was becoming difficult to buy beans from other exporters. Without this decision, it would have been impossible to continue grinding on site," a manager of a grinding plant said.
Grinders say they need to buy around 250,000 metric tons of cocoa beans during the mid-crop in order to guarantee a satisfactory supply to processing plants.
Ivory Coast's mid-crop output was expected to come in between 450,000 and 500,000 tons this season, down from around 555,000 tons last year. But cocoa production and arrivals at the ports do not seem to reflect this forecast.
"Everyone is worried because we have contracts to fulfil, but it's impossible to buy beans until the end of June, and it's impossible for grinders to reach their targets in just one month," the director of a cocoa company said.
A source from the CCC said, while closing purchases and exports was a temporary decision for June, "we'll see if more time is needed."
According to several sources, European factories waiting for Ivorian beans will have to turn to other sources for their supplies, since even multinationals such as Cargill, Barry Callebaut, CEMOI and Olam, which supply their factories in Europe, are banned from exporting beans, as are traders.
"Multinational grinders are only allowed to buy and crush locally. They can't export the beans to their factories in Europe, which also expect Ivorian beans," another exporter said.
