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Heavy rain puts Ivorian cocoa quality under threat

By Sarah Hills , 29-Jun-2011

Questions have been raised about the quality of the cocoa crop in the Ivory Coast following heavy rainfall in the region.

There are reports that adverse weather conditions are hitting the south east of the country, affecting drying and fermenting operations and damaging transport hubs to market. Damp conditions also bring with it the risk of disease.

Keith Flury, senior commodity analyst at Rabobank, is reserving judgement just yet, as he told FoodNavigator.com that there is some uncertainty as to how significant it is.

He said: “There has been some pretty heavy rainfall in certain areas of the country but we don’t see it as a widespread thing.”

However, he pointed out that infrastructure in the region does lend itself to breaking down with heavy rainfall and said that the conditions would impact not only the current mid-crop but the coming main crop.

Quality is top concern

Reuters reported on Monday that cocoa production volumes were higher than last year at more than 1.2 million tonnes this season, but quality had become a top concern since the onset of the rainy season.

Exporters said much of the 15,000 tonnes of beans arriving at ports last week was not suitable for shipment, according to the news agency.

Flury added: “You have to dry and ferment the beans in order for the quality to be sufficient. If they are not able to dry and ferment the beans,that will be the problem.”

The Ivory Coast, which supplies about 40 per cent of world cocoa, has seen turmoil recently when a political crisis there led to a four-month ban on cocoa exports. This was only lifted a few weeks ago in April.

The internationally recognized president elect, Alassane Ouattara, suspended exports, including cocoa and coffee, in January in order to cut off funding to Laurent Gbagbo, who had disputed the November 2010 election results.

The EU also imposed sanctions against trade with the country, resulting in 475,000 tonnes of cocoa beans piled up in the Ivorian ports of Abidjan and San Pedro, awaiting export.

Now the sanctions and ban has lifted, Flury said that it was still taking a while to get some of these beans out of storage.

Meanwhile purchasers, who had held off from buying cocoa during the Ivorian crisis, are now shoring up and restocking cocoa - in part to cover supply and in part to hedge against price risk.

Rabobank said earlier this month that the buying surge could result in a short selling rally but the supply of beans was likely to be sufficient to meet demand with Ivory Coast, Ghana and other African producers all reporting sizeable increases in arrivals.

According to ICCO sources, global cocoa consumption expressed in terms of cocoa beans crushing was estimated to rise to about 3.8 million tonnes during the current 2010-2011 cocoa season, up from 3.7 million tons in the 2009-2010.

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