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UPDATE 2-Ivory Coast resold 100,000 T of defaulting cocoa contracts

Published 2018-01-08, 09:56 a/m
© Reuters.  UPDATE 2-Ivory Coast resold 100,000 T of defaulting cocoa contracts
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By Ange Aboa

ABIDJAN, Jan 8 (Reuters) - Ivory Coast's Coffee and Cocoa Council (CCC) marketing board resold in late December 100,000 tonnes of cocoa export contracts that were headed for default, a senior CCC official and exporters said on Monday.

The CCC official, who asked not to be identified, said further resales were expected.

Exporters and traders have previously raised fears of a repeat of last year's crisis in the leading cocoa producer, when crashing world prices forced the CCC to resell around 350,000 tonnes of contracts. prices have remained low this season and banks are wary of lending to exporters to purchase the beans to fill their contracts.

However, two exporters said total resales this season were likely to be limited to around 130,000 tonnes of beans, with contracts for another 30,000 tonnes held by small domestic exporters expected to go back on the market in February.

The CCC did not immediately respond to Reuters requests for comment concerning the resales.

Last month the board dismissed concerns over the risk of impending defaults expressed by exporters and banks as "unfounded rumours", saying the marketing of this season's crop was progressing normally. true that the CCC resold 100,000 tonnes of contracts at the end of December to cover the defaults," the head of an Abidjan-based European export company told Reuters, asking not to be identified.

He and a second exporter with direct knowledge of the sales said France's Groupe Sucres et Denrees (Sucden), Olam International OLAM.SI , Cargill CARGIL.UL and Switzerland's Barry Callebaut BARN.S purchased the contracts.

World prices have fallen since the contracts were initially auctioned early last year, and the resales took into account current market conditions.

"It will be lost income for the CCC, but nothing comparable to last season," the second exporter said.

Exporters estimate that contract resales last year cost the CCC 200 billion CFA francs ($355 million) in lost revenues.

($1 = 563.0300 CFA francs) (Additional reporting and writing by Joe Bavier; Editing by Edmund Blair and Dale Hudson)

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