Multinational cocoa exporters operating in Ivory Coast have agreed to sell their domestic counterparts 60,000 of the 150,000 tonnes the Ivorian companies say they need to avoid default, three sources involved in the talks said on Thursday.
The agreement was reached during negotiations this week between the GNI, Ivory Coast’s traders association; GEPEX, the body representing the multinationals; and the Coffee and Cocoa Council (CCC), the industry regulator, the sources said.
The sources - one from each organization - spoke to Reuters on condition of anonymity to discuss ongoing negotiations.
Discussions about the possible sale of the 90,000 additional tonnes the domestic exporters say they need will continue, with GEPEX seeking export contracts from the GNI in exchange, the sources said.
The GNI told Reuters earlier this week that its members fear going bankrupt because they cannot compete with the higher prices multinational companies are paying for beans in Ivory Coast, the world’s largest cocoa producer.
Western chocolate companies such as Lindt, Hershey and Ferrero pay a premium for sustainable cocoa made with fair trade certification, buying mainly from multinational companies such as Cargill, Olam and Barry Callebaut.
Domestic exporters win a much lower share of those lucrative contracts and therefore have less financial muscle to buy cocoa beans - whose price has been inflated by purchases from the multinationals - to service other export contracts.
As a result, they run the risk of defaulting on their commitments, the GNI says.
The GNI source said the price and sale terms agreed for the 60,000 tonnes "allowed the Ivorian exporters and processors to not buy at a loss, so it’s a good deal."
The GEPEX source said the multinationals would insist on receiving additional export licenses from the GNI so that they can offload large stockpiles of beans they are sitting on.
GEPEX also wants the CCC to lift a rule that prohibits exporters from paying over the official price for beans while the GNI wants the regulator to grant its members contracts for 200,000 tonnes of certified cocoa exports, the sources said.