Cocoa Revenues to Rise: Despite the Political Unrest, Cote d'Ivoire's Cocoa Export Revenues, Which Account for 30% to 40% of the Country's Exports, Could Increase Dramatically This Year. (Commodities)

Article excerpt

Guy Main-Gauze, Cote d'Ivoire's former Minister of Trade and now special adviser to President Laurent Gbagbo, made a point of reassuring participants of the second World Coffee and Cocoa International Fair held in Brussels recently that Cote d'Ivoire would remain the world's leading cocoa exporter with a 45% share of global production.

Gauze is widely acknowledged as a foremost expert on the world's cocoa markets. Using estimates from the Ivorian government and from the chocolate producer and trader, Hoffmans, he forecast that the 20022003 cocoa crop should amount to between 1.1m and 1.3m tons of beans, more or less unchanged from last year. But Cote d'Ivoire is expecting a 40% increase in cocoa export revenues for this period.

The main reason for this increase, said Gauze, is due to market fundamentals. For the last two years, demand has been outstripping supply. With most other large producers such has Ghana, Brazil, Malaysia and Indonesia experiencing a drop in their cocoa harvests demand was still exceeding supply by 110,000 tons, accelerating a reduction in world stocks.

This has led to a 45% to 60% increase of the world price over the October 2002 March 2003 period, which at one point reached [pounds sterling]1,843/tonne. The crisis in Cote d'Ivoire, and speculations about the risk to San Pedro and Abidjan ports as a result of a rebel blockade or attack, also served to boost world prices.

The fact is that, despite the crisis, Cote d'Ivoire has managed to safeguard its infrastructure and its cocoa production. Gauze does not dispute the fact that political instability encouraged the smuggling of cocoa from Cote d'Ivoire to neighbouring Liberia and Guinea-Conakry. Even though reports have appeared in the Ivorian press that the rebel Movement for Justice and Peace was involved in this smuggling from the west of the country, he thinks the extent of the problem is insignificant. Moreover, he said, the Conakry authorities have promised to stop smuggled Ivorian cocoa from being exported through their country.

Gauze also disagrees with alarming reports that Cote d'Ivoire's cocoa export potential has been harmed by the exodus of many Burkinabe and Malian employees. He points out that most Ivorian cocoa plantations are in government controlled areas and most agricultural workers have remained in the country. …