* Ghana's cedi has slipped 23 pct against dollar this year
* Farmers seeking to cash in on I.Coast's higher price
* Trafficking likely to continue, analysts say
By Joe Bavier and Sarah McFarlane
ABIDJAN/LONDON, May 12 Ghana's falling currency
has fuelled smuggling of as much as 100,000 tonnes of cocoa into
neighbouring Ivory Coast since October, reversing a trend,
industry sources said.
Cocoa smuggling between the world's two biggest cocoa
producers is common, but over the past decade it has mainly
involved Ivorian beans being taken illegally to
That has changed this season.
Ghana's cedi currency, which the government has struggled to
prop up, has fallen nearly 23 percent against the dollar so far
this year, while Ivory Coast's euro-pegged CFA franc has
remained stable, making the country's official farmer price
around 24 percent higher than Ghana's.
Exporters said the Ivorian price is now seen as more
attractive by Ghanaian farmers, who can make bigger profits
selling their output to smugglers.
"(The smuggling) is due primarily to the weakness of the
currency in Ghana," said Edward George, head of soft commodities
research at Ecobank.
George said he had spoken to private sector representatives
in Ghana as well as officials from Ghana's marketing board,
"The lowest estimate we heard was 60,000 tonnes. The highest
was 100,000 tonnes, and that was from Cocobod," he said.
Cocobod spokesman Noah Amenya confirmed smuggling was taking
place but said the organisation did not have any figures.
"We are supporting the local authorities and the various
task forces to fight the smugglers," he told Reuters.
Estimates of smuggled volumes obtained by Reuters from four
European traders ranged from 40,000 to 80,000 tonnes of beans,
while exporters in Ivory Coast put the figure at between 50,000
and 60,000 tonnes.
Bean arrivals at Ivorian ports reached around 1.3 million
tonnes by May 11, according to exporters' estimates, up more
than 10 percent from the same time last season.
SMUGGLING LIKELY TO CONTINUE
Ivory Coast's October-to-March main crop opened on Oct. 2
with its sector regulator, the CCC, fixing a minimum guaranteed
farmer price of 750 CFA francs ($1.59) per kg. Ghana's price of
3,392 cedis per tonne was roughly on par with Ivory Coast's at
Despite the beans lost to smuggling, Ghanaian cocoa output
still remains more than 15 percent ahead of last year's levels
with purchases reaching 704,266 tonnes by April 8 since the
start of the main crop.
But Ivory Coast decided to maintain its farmer price at the
main crop level of 750 CFA francs/kg for April-to-September
mid-crop cocoa, which is usually sold at a discount.
This in turn could further fuel illegal trafficking as Ghana
heads towards its light crop in July unless they raise the
price, analysts said.
"Looking forward, it depends what happens to the farmer
price because a depreciating cedi means Ghana should be able to
increase their price by more (than Ivory Coast), to where it
should be in dollar terms," said a European analyst who declined
to be named.
($1 = 473.1710 CFA Francs)
(Additional reporting by Kwasi Kpodo in Accra and Ange Aboa in
Abidjan; Writing by Joe Bavier; Editing by David Lewis)