Currency slump causes increase in cocoa smuggling #ghana

Cocoa beans have been smuggled between Ivory Coast and
neighboring Ghana for years. Until recently, Ivorian growers
most often illegally sent their cocoa beans into Ghana
where the prices were higher and more stable. A recent
slump in the Ghanaian currency and political stabilization in
Ivory Coast, however, have tipped the balance. Ghanaian
farmers are now the ones who smuggle their beans into
Ivory Coast, where they get more money for them.
During recent political turmoil in Ivory Coast, Ghana's
stability and fixed cocoa prices made it an attractive market
to Ivorian growers. But the situation in Ivory Coast is now
settled and the government has established a minimum
price to be paid to cocoa farmers to keep Ivorian cocoa
beans at home. Meanwhile, Ghana's currency, the cedi, has
declined by more than 40 percent against the dollar this
year. For the cocoa growers, this means a loss of income.
They can make a bigger profit by smuggling their output to
Ivory Coast and selling it at a higher price.
"The farmers are compelled to give most of their produce to
the buyers from Ivory Coast so they can get enough money
for their children; it is not that they are willing. It is the
situation that is compelling them to do so," said Alfred
Allotey, a cocoa depot manager.
Ghanaian farmers who do not send their cocoa beans to
Ivory Coast are urging the government to stop the practice.
"Ghana is our country. We use the cocoa to pay our men, to
build our hospitals and all kinds of roads. If we don't stop
them, our country is going to go down," said one Ghanaian
farmer.
One way to discourage the smuggling would be to increase
the price of cocoa in Ghana, but the government has
accumulated a budget deficit and can hardly afford that. As
long as there are buyers in Ivory Coast who will pay more
for Ghana's better quality beans, the smuggling is likely to
continue. And some Ivorians see nothing wrong with that.
"It's not the cooperatives who will help them out, because
they are the ones who will be paying for their own fuel in
order to sell their cocoa and I for one will buy it from them.
That's the way it is," said Adoni Nkanza, a member of a
cooperative.
Ivory Coast is the world's largest producer and exporter of
the cocoa bean, an essential ingredient in producing
chocolate. Ivory Coast, Ghana and other West African
countries together produce two-thirds of the world's cocoa
crop. Industry sources estimate that since last October, up
to 100,000 tons of beans have been trafficked across the
border into Ivory Coast. Industry officials say they will open
discussions on how the two countries can work together to
combat the smuggling.