Ivory Coast bans cocoa exports

UN-backed parallel government stops exports, claiming chocolate revenue buys arms to support ousted president Laurent Gbagbo

guardian.co.uk, Pauline Bax in Abidjan and Graeme Wearden in London, Tuesday 25 January 2011 10.08 GMT

Exporters in the port of Abidjan: Ivory Coast is the world's largest exporter of|
cocoa beans, supplying 40% of the world's output. Photograph: Luc Gnago/REUTERS

Chocolate consumers in Europe have been warned that major cocoa companies are effectively providing the Ivory Coast president, Laurent Gbagbo, with money to buy weapons.

Alassane Ouattara, the internationally recognised winner of last November's disputed presidential election, announced a one-month suspension on exports of cocoa yesterday.

Ouattara said anyone flouting the blockade would be considered to be "financing the illegitimate regime" of Gbagbo, who is refusing to leave office.

An official in Ouattara's parallel government, which is working from a hotel in Abidjan, claimed: "Chocolate consumers in Europe may not be so happy to realise the big cocoa companies are providing Gbagbo with money for weapons."

Cocoa, the key ingredient in chocolate, is Ivory Coast's single biggest source of revenue, providing about $1bn (£629m) per year according to some estimates. By temporarily halting exports, Ouattara hopes to starve Gbagbo of the financial muscle to keep clinging to power.

Ivory Coast is the world's largest supplier of cocoa, contributing around 40% of global output. The cost of a tonne of cocoa jumped by 6.2% to $3,393 (£2,133) yesterday, the highest level since January 2010. Cocoa prices have been rising steadily since the election, and analysts have predicted that they could continue to escalate unless the deadlock is resolved.

But cocoa exporters in Ivory Coast said they were confused about the ban, which does not apply to beans that have already been declared for export. Shippers can continue to buy beans from farmers in the interior of the country, according to the Ouattara government official, who did not wish to be named.

Ouattara has repeatedly accused Gbagbo of buying arms and ammunition to crack down on his opponents and launch a new civil war. While the export ban is meant to starve Gbagbo of cocoa revenues, the Ouattara government has no means of enforcing the ban, the official said.

"Exporters can choose not to listen to us and export their beans anyway, but we are trying to appeal to their conscience," he said.

The export ban prompted US-based Cargill, which buys about 15% of Ivory Coast's crop, to suspend purchases of the bean indefinitely. But confusion reigned in the offices of other exporters, who said they were waiting for instructions from headquarters in Europe or the US.

"All exporters are in the same situation," said a European industry official in Abidjan. "We are caught between the hammer and the anvil. But every exporter is going to have to decide for themselves."

The statement from Ouattara came on the heels of an EU trade ban that has left many exporters scrambling for answers as to how to conduct business with Ivory Coast. The EU sanctions apply to people, institutions and businesses seen as loyal to Gbagbo, including the country's two ports, several banks, and the national petroleum company.

Ivory Coast's lucrative cocoa sector has been plagued by corruption since the World Bank-led privatisation of the sector in 1999. Gbagbo had several senior executives of state-controlled cocoa agencies detained on charges of fraud after a 2007 government probe into corruption.

The industry is run by a provisional national cocoa management committee headed by Gilbert Anoh, a Gbagbo ally, who is on the EU sanctions list. The EU sanctions have made it more difficult and more expensive to charter ships, the European cocoa exporter said. "Our ability to export also depends on the arrival of ships from Europe. We had been expecting vessels by the end of January, but it all seems to depend on the EU guidelines now."

Cocoa and coffee exports fuelled Ivory Coast's economic success during the 1970s. Millions of African immigrants staked out small plots of land in the lush interior to plant cocoa and coffee trees.

Despite ageing plantations and years of government neglect of the agricultural sector, the country remains the biggest cocoa grower in the world.

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