Ivory Coast cocoa industry split over export ban

By Selay Marius Kouassi and Michael Logan Jan 26, 2011, 11:07 GMT

Abidjan - Cocoa prices have spiked since Ivory Coast's would-be president Alassane Ouattara sought to ban exports from the world's largest producer of the bean used in chocolate - but the cocoa industry in the West African nation is split over whether to heed the call.

The proposed month-long ban, which was supposed to come into force Monday, was designed to heap more pressure on President Laurent Gbagbo, who has refused to cede power to the internationally- recognised Ouattara after disputed elections in November.

Ouattara's embargo on one of the mainstays of Ivory Coast's economy is the latest in a string of measures - including international travel bans and asset freezes on Gbagbo and his allies - aimed at forcing the defiant leader from power.

Cocoa prices in London and New York, already inflated by Ivory Coast's political crisis, jumped by as much as seven per cent when the jittery markets opened on Monday. Yet there so far appears little sign of delivery slowing.

At the Port Autonome d'Abidjan, officials said cocoa exports from the West African nation - which supplies around one third of the world's cocoa - continued as normal throughout Tuesday.

'The truck-loads of cocoa have not stopped coming since this morning,' said Sery Drepoba Leandre, spokesperson for the port. 'There is no disruption in cocoa exportation activities.'

Ouattara's intention is to choke the supply of cocoa money to Gbagbo's regime, preventing him from paying civil servants and the military he has been using to cling to power. However, he is blockaded inside an Abidjan hotel while Gbagbo has control of all state institutions, making it impossible to enforce a ban.

Gilbert Anoh N'Guessan, head of the national cocoa management board and a Gbagbo ally, on Monday told cocoa operators they should ignore the order - a message reinforced later in the day by a message from Gbagbo's prime minister on national television.

Gbagbo's security forces have proven ruthless in quelling dissent. The United Nations says over 250 people have died following the vote, many of them at the hands of the military.

Yet Ousmane Attai, a cocoa specialist in Abidjan, said some traders - convinced fierce international pressure and the threat of military action from regional bloc ECOWAS will eventually force Gbagbo out - will heed his call.

Meroux Loic is one such trader.

'I don't want to spoil my cocoa trade business for ever,' he said. 'What will I do when Ouattara takes office and his appointed team run national administrations? I don't want to compromise my chance to continue this business.'

Others, however, say pressing financial concerns mean they cannot afford to shut down their businesses.

'I borrowed money and have invested plenty of money to buy these beans from remote areas of the country,' said Najib Ezzedine, one of the biggest cocoa traders in Ivory Coast. 'I have to sell them now to refund the sum that I borrowed and I have to meet the deadline set by the bank, otherwise, I am done ... I can't stop my cocoa trade now.'

So far, there has been little impact other than the price spike. The Federation of Cocoa Commerce and the European Cocoa Association said in a joint statement they were working to address the challenges, and chocolate manufacturers said they were not concerned over supplies in the short-term.

'We expect that a complete understanding of the export ban and its implications will require some time, but we are certain that in the short term this will not impact our ability to manufacture the chocolate products that our consumers desire, with the quality they expect,' chocolate manufacturer Mars said in a statement.

This situation could change should the European Union and United States choose to institute a trade embargo on Ivory Coast - shutting down the supply of those who continue to export.

The US on Monday said it supported Ouattara's ban, although Maja Kocijancic, spokeswoman for EU foreign policy chief Catherine Ashton, said that while a trade embargo was a possibility, it was 'not an immediate option.'

Rumours of an embargo on cocoa and coffee rippled through Abidjan, leading a Gbagbo ally to warn Ivory Coast would respond to any attempts to block exports.

'If the European bloc dare impose a ban on Ivory Coast cocoa and coffee productions on its territories, Ivory Coast will also impose a ban on all European ships,' said Marcel Gossio, the director of the port. 'No European ships will be allowed in our ports and we will turn towards new partners in Asia, Africa and Latin America.'