Cocoa rotting on trees after Ivory Coast exporter defaults

Cocoa is rotting on plantations and jamming up warehouses in western Ivory Coast's growing heartland as a wave of defaults by exporters has left few buyers for what is shaping into a strong harvest, farmers and co-operative heads said on Friday. The top producer's Coffee and Cocoa Council (CCC) acknowledged last week that some companies, having wrongly speculated that world cocoa prices would extend years-long gains, had defaulted on export contracts.
Cocoa has piled up at the ports of Abidjan and San Pedro for weeks as those exporters declined to purchase beans to fill unprofitable contracts. The blockage has demoralised farmers. "If I harvest now I can't sell anyway, so I prefer to leave the pods on the trees while I look for a solution for the cocoa I've already harvested that's stacked up in my house," said Seydou Kone, who farms a plantation near the town of Daloa.
Across western Ivory Coast, a Reuters reporter saw over-ripe cocoa left to rot on trees. Other pods had been harvested and abandoned in piles on the ground. Of 17 farmers interviewed in and around the towns of Vavoua, Daloa, Duekoue, Bangolo and Fengolo, 12 said they are stocking cocoa that they've been unable to sell for weeks.
The remaining five sold their beans below the CCC's mandated price of 1,100 CFA francs ($1.79) per kg. "It's really difficult I can't sell. The co-operative refuses to buy and so do the merchants," said Emile Yao Kouadio, seated in front of the COOPAHK farmer co-op in Duekoue where he checks the buying situation every three days.
COOPAHK has 150 tonnes of cocoa in its warehouses. Since late December its trucks, loaded with beans, have been parked at the port in Abidjan where it has unsuccessfully sought buyers. Amid the glut at the ports, the CCC has sold up to 200,000 tonnes of cocoa for export between January and March in spot auctions in anticipation of the forward sales defaults.
But exporters have backed away from the auctions in recent weeks, concerned that the CCC lacks sufficient resources in its reserve fund to support the sales. They expect the farmer price to be lowered at the start of the mid-crop on April 1 and say they would rather play it safe and wait. "Our members continue to call us to pick up their cocoa, but we've stopped. I have to drive around tomorrow to explain it to them," said Diarra Fousseni, head of the CAG co-op near the town of Fengolo.
He showed a text message from an exporter in Abidjan dated February 2, announcing it was no longer purchasing beans. Other co-ops said they had received similar messages from exporters. "We don't understand this situation and we don't know what to do. The government has abandoned us," said Richard Keke, who farms eight hectares near the village of Bonon.