Latest news with #Guinea
Japan Times
3 days ago
- Business
- Japan Times
High cocoa prices drive smuggling surge, alarming traders
At the town of Gbapleu, a rope tied between two metal barrels separates Cote d'Ivoire from Guinea. A thin trickle of traffic passes through the border post, mostly motorbikes or cars stuffed with passengers and overburdened with food and household items tied to their roofs. For those who want to avoid the scrutiny of officials, there are other routes. Scattered throughout the region are dirt tracks that snake through the forests and grassland. After dark, motorcycle couriers arrive at warehouses in Ivorian towns near the frontier and load up with two or three sacks of cocoa, each weighing about 65 kilograms. From around 10 p.m., the riders set out for the border in a convoy, dodging the checkpoints to carry beans into Guinea. It's a dangerous, but lucrative business. If they're caught, smugglers face up to 10 years imprisonment or a fine of 50 million CFA francs ($86,640). But the smugglers can earn over $240 a week, more than three times the country's living wage. The trade has become increasingly worth the risks as cocoa prices have spiked. "God has been on our side this season,' said Fred, a smuggler in the border town of Danane, who asked to be identified by a pseudonym to avoid retribution. Prices for cocoa on the global market have nearly tripled since 2023, reaching around $13,000 per ton in December, before falling back to around $9,000. Adverse weather and disease outbreaks have exacerbated supply issues caused by decades of underinvestment in major producing countries, leading to severe shortages. But as prices soar, farmers in Cote d'Ivoire, the largest exporter of the crop, have found it hard to cash in. The cocoa trade in the country is controlled by a government-run regulator, the Conseil du Cafe-Cacao (CCC), which sets prices. The current CCC price is about a third of the global market price, which has created a powerful incentive to smuggle crops into neighboring countries that don't have the same central pricing. The surge in smuggling has made it harder for international buyers to source beans, as Ivorian suppliers struggle to fulfill their contracts. It has made traceability more difficult, a major problem for companies trying to address long-running issues of deforestation and child labor in their supply chains. For the Ivorian government, smuggling has cut revenues, undermining its national budget and its ability to invest in the long term future of the cocoa industry. Fermented cocoa beans dry in the sun on a farm in Azaguie. | Bloomberg "There is a huge loss of Ivorian harvest,' Arsene Dadie, director of domestic marketing at the CCC, said in an interview in Abidjan, Cote d'Ivoire's commercial hub. The CCC sells cocoa crops months ahead of harvest, which helps them to set a guaranteed price for farmers at the start of the season. That meant that as prices rallied last year, regulators had already committed to sell most of their cocoa well below the global market price. Farmers typically sell to brokers and middlemen who aggregate the crops and sell to major buyers, such as Barry Callebaut, Cargill, Olam Group and Touton. Ghana, the world's second-largest producer, has a similar setup to Cote d'Ivoire, with the Ghana Cocoa Board acting as a central buyer. Output in Ghana fell to its lowest in more than a decade last season. Smuggling exacerbated the supply shortfall. In April, prices in Guinea, Togo and Liberia were more than double those the CCC was offering, creating an arbitrage that some farmers and middlemen couldn't resist exploiting. The scale of the smuggling can be estimated from the growing disparity between Guinea's production and exports. Guinea hasn't appreciably invested in increasing its domestic cocoa crop, but in the 2023-24 growing season, shipments from the country rose 15% over the previous year, according to data provider Trade Data Monitor. That growth has continued. In the first three months of the current season, starting October, Guinea's cocoa shipments were more than twice the previous year. "You can assume that Guinea has been enjoying nice prices and increasing its production, so maybe a 10% increase would be a good accomplishment already but not enough to move from 25,000 to 95,000 tons,' said Fabrice Laurent, founder of cocoa research firm Forestero. The bulk of Guinea's cocoa ends up in Europe, with the Netherlands accounting for about 70% of all Guinean exports between January and December, according to Trade Data Monitor data. A cocoa-processing plant in Abidjan, Cote d'Ivoire | Bloomberg Over the 2023-24 season, beans arriving for export at Ivorian ports dropped by 30%. Some of the drop is down to bad weather that battered crops, but Laurent estimates that around 100,000 tons were smuggled out of the country, mostly into Guinea, Togo and Liberia. That compares with the total harvest of about 1.7 million tons. With every smuggled ton of beans, the country is losing out on export duties. The cocoa sector accounts for about 40% of Cote d'Ivoire's export revenue, making it a vital source of foreign exchange. The rise in illicit flows has left buying agents struggling to find enough cocoa to fulfill their contracts with international traders. Last year, exporters faced significant losses after both Ivory Coast and Ghana were unable to honor presold contracts. Frustrated traders in Abidjan, speaking on condition of anonymity to discuss sensitive information, said they were torn between breaking the law and overpaying to source supply, or failing to meet their obligations. Several admitted that they are now paying a premium over farm gate prices to secure beans, in defiance of CCC rules against overpaying. Cocoa traders typically hedge their physical purchases by selling futures contracts. Delayed cocoa shipments last season forced traders to buy back their short positions and initiate new ones at a time of rapid price inflation, with futures climbing from roughly $3,000 to $11,000 per ton. One of the traders said that they lost £2,000 ($2,700) on every ton's worth of defaulted contracts, as they were forced to roll over futures contracts at higher prices. The rise in smuggling complicates chocolate makers' efforts to improve traceability in their supply chains. Consumers are increasingly conscious of human rights and environmental risks in the cocoa business, which has put pressure on companies to invest in understanding where their beans are grown. At the moment, traceability is largely voluntary, but that will change for large companies in Europe when the European Union Deforestation Regulation (EUDR) comes into effect on Dec. 30. The law will require that traders provide documentation tracing supply back to the farm level. "People are bracing for EUDR and even though supply was tight, major traders were not willing to buy cocoa just from anyone,' Jonathan Parkman, head of agricultural sales at Marex Group, said. That makes smuggling a top concern for traders and buyers, he added. A delivery truck waits to unload sacks of cocoa beans at a re-bagging facility in San-Pedro, Cote d'Ivoire. | Bloomberg Several traders in Abidjan and middlemen in the western towns of Danane and Duekoue spoke of their experience on condition of anonymity to avoid reprisals. They said that they felt that the government isn't doing enough to crack down on smuggling, however, and that corrupt officials are aiding the illicit trade in beans across the border. While smugglers such as Fred move small cargoes of cocoa into Guinea, much of the trade happens in bulk, with organized, politically connected networks moving trucks carrying upward of 30 tons of cocoa at a time, according to smugglers, officials and traders. That's an expensive exercise, as the smugglers need to have enough capital to buy the beans from farmers or brokers, pay for logistics and spare some money for bribes. Bribes range from $8,000 to $21,000 per truck, according to smugglers and traders who asked not be named so they could discuss sensitive information. "It's the influential business people who have mastered the art of smuggling these goods, also working with civil servants who are happy to get their cuts from it, so it's a chain,' Ndubuisi Christian Ani, a Nigeria-based analyst at the Institute for Security Studies think tank, said. The CCC's Dadie said that the government has stepped up its anti-smuggling efforts. "It's a well-organised network but the CCC is working with the local anti-smuggling system to increase monitoring,' he said. This season the military was deployed to the border, and the Ministry of Interior has set up regional anti-smuggling committees with the regulator. They are tasked with publicizing and combating illegal cocoa sales, a CCC spokeswoman said. "As soon as the taskforce was set up, we seized three trucks and saw that a certain number of administrative actors who did not subscribe to this vision were sanctioned,' Dadie said. In a statement, Fidele Sarassoro, head of Cote d'Ivoire's national security council, said that anti-smuggling operations set up in October last year had achieved "significant results,' including the seizure of more than 590 tons of cocoa, and the arrest of 34 people. In February, Ivorian customs seized a stock of 2,000 tons of cocoa, worth around $19 million, which had been falsely declared as rubber. The leakage of crops, on top of the other structural challenges to the industry, is leading to frustration throughout the supply chain. In Duekoue, a town 400 kilometers from Abidjan, Abdul Baudula, the head of a farmers' cooperative that aggregates beans, said that the organization failed to meet its collection targets last season, partly because farmers sold their crops to smugglers. "How do you convince a farmer to accept less money when another trader is offering more?' Baudula said. "We can't control climate change, but smuggling should be something the government can address.'
Bloomberg
4 days ago
- Bloomberg
High Cocoa Prices Drive Smuggling Surge, Alarming Traders
By and Baudelaire Mieu Save At the town of Gbapleu, a rope tied between two metal barrels separates Ivory Coast from Guinea. A thin trickle of traffic passes through the border post, mostly motorbikes or cars stuffed with passengers and overburdened with food and household items tied to their roofs. For those who want to avoid the scrutiny of officials, there are other routes. Scattered throughout the region are dirt tracks that snake through the forests and grassland. After dark, motorcycle couriers arrive at warehouses in Ivorian towns near the frontier and load up with two or three sacks of cocoa, each weighing about 65 kilograms (143 pounds). From around 10pm, the riders set out for the border in a convoy, dodging the checkpoints to carry beans into Guinea.
Reuters
4 days ago
- Business
- Reuters
Finance deals announced during UN Ocean Conference
LONDON, June 16 (Reuters) - The third U.N. Ocean Conference in France last week yielded a number of financial deals and money pledges to help protect the seas, although the gap between funding and the estimated annual need of $175 billion remains large. Below are a selection of the initiatives announced during the week: A group of development banks including the European Investment Bank and Asian Development Bank said they planned to invest 3 billion euros ($3.5 billion) by the end of the decade to help prevent plastic pollution reaching the sea. The Development Bank of Latin America and the Caribbean (CAF) said it will invest $2.5 billion between 2025 and 2030 in investments aimed at protecting the oceans and supporting sustainable marine economic activities. French development bank AFD and the World Bank helped mobilise 119 million euros in Guinea to improve the living conditions of coastal and rural communities in the face of climate change. The AFD provided an additional 2 million euros to extend work on preserving Mediterranean coastal ecosystems in North Africa until 2029. A total of 1.8 million euros were allocated to help strengthen Marine Protected Areas in the Mediterranean and Costa Rica. Investment firm Swen Capital Partners said it had raised 160 million euros for its SWEN Blue Ocean 2 fund and said it was targeting 300 million euros for the world's largest ocean impact fund focused on start-ups looking to support ocean biodiversity. ($1 = 0.8638 euros)
Zawya
4 days ago
- Politics
- Zawya
Ambassador of the Republic of Sierra Leone paid a courtesy call on African Union Commission (AUC) Chairperson
AFRICA H.E. Harold Bundu Saffa, Ambassador of the Republic of Sierra Leone to Ethiopia&Permanent Representative to the AU, paid a courtesy call on H.E. @ymahmoudali, Chairperson of the AU Commission, to convey a message of congratulations on his election. They took the opportunity to exchange views on the ongoing efforts to restore constitutional order in the Republic of Guinea&on the broader developments in the West African region. Distributed by APO Group on behalf of African Union (AU). Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an 'as is' and 'as available' basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release. The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk. To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages. © ZAWYA 2025
Zawya
4 days ago
- Politics
- Zawya
Shri Sandeep Sood appointed as the next Ambassador of India to the Republic of Guinea
Shri Sandeep Sood (YOA:2009), presently Director in the Ministry, has been appointed as the next Ambassador of India to the Republic of Guinea. 2. He is expected to take up the assignment shortly. Distributed by APO Group on behalf of Ministry of External Affairs - Government of India.
