Ivory Coast Regulator Targets Fairtrade Cocoa Fraud

Ivory Coast's market regulator plans to combat fraud in Fairtrade cocoa contracts. An exponential surge in certifications led to the suspension of sales. Measures include limiting buyers and improving traceability to align with European anti-deforestation import standards.

Ivory Coast's market regulator is planning to introduce measures aimed at curbing fraud related to fairtrade certified cocoa contracts, its managing director, Yves Brahima Kone, said on Thursday. The Coffee and Cocoa Council (CCC) suspended sales of fairtrade certified contracts last month after recording an exponential increase in certified cocoa.

"This year, we have found that 97% of our cocoa is Fairtrade certified. That's not possible, and you can't make me believe otherwise," Kone said at a meeting with cooperatives and buyers at the regulator's headquarters in Ivory Coast's commercial capital Abidjan. He said around 50% of cocoa was usually getting certification in the recent years and that buyers and cooperatives were using this program to push multinational companies into overpaying.

If their cocoa is certified, buyers can receive a premium of 200 CFA francs on top of 80 CFA francs per kg guaranteed by the regulator. Kone also said that some buyers used the postponement of contracts for the 2023/24 main cocoa crop to stock cocoa they bought for 1,000 CFA francs ($1.66) per kg and sell it at 1,500 CFA francs.

To put an end to fraudulent contracts, the regulator is considering an option to limit the number of cocoa buyers to 30 from more than a thousand. Buyers and cooperatives told the regulator the solution would be to raise the buyers' margin from the current 80 CFA francs per kg to 200 CFA francs.

"We can't meet the price because our costs are too high while the margin is insignificant," said a buyer present at the meeting. The regulator said a remuneration increase was possible and was under examination.

Etienne Tehua, director of FairTrade West Africa operations, told Reuters by phone that they have requested a list of buyers involved in the fraudulent activities to carry out audits. "This decision by the CCC to suspend these buyers and cooperatives is a good thing because it's not what FairTrade wants for the growers," Tehua said.

Next year, Ivory Coast will introduce a new certification and traceability system to bring Ivorian cocoa into line with European regulations on the import of commodities linked to deforestation. It is expected to reduce the possibility of fraud. ($1 = 600.7500 CFA francs)

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