BELGIUM/FILE: Belgian chocolate makers worry about a hike in cocoa prices after an export ban on cocoa beans by top grower Ivory Coast

Record ID: 181926

  • Title: BELGIUM/FILE: Belgian chocolate makers worry about a hike in cocoa prices after an export ban on cocoa beans by top grower Ivory Coast
  • Date: 24th March 2011
  • Summary: ABIDJAN, IVORY COAST (FILE - NOVEMBER 28, 2010) (REUTERS) (*** FLASH PHOTOGRAPHY ***) IVORY COAST PRESIDENTIAL CLAIMANT ALASSANE OUATTARA CASTING HIS VOTE IN PRESIDENTIAL ELECTIONS IVORY COAST INCUMBENT PRESIDENT LAURENT GBAGBO WAVING TO CROWDS
  • Embargoed: 8th April 2011 13:00
  • Keywords:
  • Location: Belgium, Cote d'Ivoire
  • City:
  • Country: Belgium Cote d'Ivoire
  • Topics: International Relations,Industry
  • Reuters ID: LVABOVH0M0NSDF7QU2JGWM6L0UDX
  • Story Text: Belgian chocolate- a star favourite not far behind on the list from Belgian beer, Tintin and female tennis stars.
    But an export ban on Ivory Coast cocoa beans is adding to the difficulties of a sector already hit by an increase in commody prices.
    A dispute between Alassane Ouattara, whose claim to presidency has U.N. backing, and incumbent Laurent Gbagbo over a November election has plunged Ivory Coast into conflict.
    As a result, Ouattara has called for a freeze in cocoa exports to deprive the Gbagbo camp of funds coming from the payment of export taxes.
    For small to medium-sized chocolate makers in Belgium, the crisis presents serious financial problems even though supplies are for the moment not affected.
    Cafe Tasse general manager Andrea Gembler said the bill she received from chocolate supplier Barry-Callebaut had already increased by several thousands euros since the crisis in Ivory Coast began.
    Gembler said she cannot dump the costs on to her consumers.
    "Today, Cafe Tasse has to find solutions for 2012 so that the price rise is limited and the consumer doesn't bear all the burden," Gembler said.
    This means new packaging, new products and better management of cocoa purchase, Gembler said.
    Gembler said she sees price increases of 3 to 4 percent on Cafe Tasse chocolate in the long-term, but added any increase over 20 percent would be "suicide."
    The director for strategic business at Belgium chocolate supplier Belcolade, Rik Balcaen, echoed Gembler's concerns.
    "Ivory Coast is producing about 40 percent of the worldwide cocoa crop, so that means that a serious problem in Ivory Coast will give a serious problem for everyone in the chocolate business," Balcaen said.
    Balcaen said Western Europe is particularly exposed to the situation in Ivory Coast because it imports 50 percent of the cocoa beans from there.
    Worsening violence has already claimed over 400 lives and prompted nearly half a million Ivorians to flee their homes.
    Northern-based rebels from the 2002-2003 civil war have declared their support for Ouattara and have taken several towns in the west from Gbagbo forces.
    In a cruel irony for a country that some analysts say is now in the midst of an all-out civil war, Ivory Coast is having a bumper cocoa season.
    Yet the Ouattara call, the EU sanctions and the collapse of the local banking system have meant over 450,000 tonnes of stocks are languishing in storage, and concerns about a deterioration in quality are growing by the day.
    Ivory Cost exports incur an export tax (DUS, "droit unique de sortie") of 17 percent. The resumption of exports would mean a windfall that would give Gbagbo's government ample funding to pay the monthly salaries of army and civil servants.
    In the past, Balcaen said, consumers and suppliers were able to adjust to rises in chocolate prices by buying cheaper commodities.
    But he said current prices for these have risen, too: "In the past, last year, sometimes price increases for cocoa were compensated by our customers by lower milk prices, by lower sugar prices. But today, almost every commodity, almost every ingredient is going up. So I think that chocolate prices will continue to increase over the next months."
    Commodities such as cocoa, coffee and sugar have hit the highest prices for three decades, while grains, vegetable oils and crude oil have also risen.
    Ouattara has announced he would continue the export ban, which began on January 23, until at least March 31.
    But Gembler said even with a potential price hike looming she is not worried people will stop buying chocolate.
    "The people are going to buy smaller quantities, maybe they will buy less often but anyway chocolate will always have the same success,'' she said.
    ''Chocolate is magic."
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