Barry Callebaut Sees Rise in Ivorian Main Crop Cocoa

ABIDJAN, (Reuters)

Cocoa production from top grower Ivory Coast's October to March main crop will reach around 1.06 million tonnes with disease and cross-border smuggling likely to have little effect on output, Swiss chocolatier Barry Callebaut said on Monday.

Initial fears that the negative effects of a prolonged dry spell earlier in the year could cut into Ivorian output have been replaced by worries of disease outbreaks due to heavy rains, but De Petter said neither phenomenon will dent production.

"On the coast, there isn't much cocoa, because it was very dry. But in the interior production seems better and that balances out," Paul De Petter, director for West Africa, told Reuters.

"I saw a bit of black pod in the production regions, but it's not as serious as two years ago when it made 100,000 tonnes disappear in just a few weeks."

The company's estimates put main crop production in neighbouring Ghana, the world's number 2 cocoa producer, at 620,000 tonnes,

"Our latest estimate for the main crop (in Ivory Coast) this year is 1,060,000 tonnes by the end of March," De Petter said. Barry Callbaut buys around 200,000 tonnes of Ivorian cocoa annually.

"For Ghana, our (main crop) estimate is 620,000 tonnes," he said.

The forecast production would be a slight improvement upon the 2011/12 main crop harvest which reached 1,047,000 tonnes amid poor weather conditions.

Ghana's cocoa industry regulator Cocobod said in September it expects to purchase 800,000 tonnes during the entire 2012/13 crop year, a drop of around 5 percent from the previous season and its main crop at 750,000 tonnes.

Ghana runs a two-cycle cocoa season consisting of the October-June main crop harvest, which is mainly exported, and an 11-week light crop, which is discounted to local grinders.

The 2012/13 season in Ivory Coast opened on Oct. 3 under a major reform of the sector that is being closely monitored by traders for its possible impact on supplies.

Under the reform, Ivory Coast's marketing board, the Coffee and Cocoa Council, set a season-long farmgate price of 725 CFA francs ($1.42) per kilogramme.

Though the price is expected to improve incomes for hundreds of thousands Ivorian cocoa farmers, who struggled under the previous system of spot buying, it is still around 25 percent lower than the guaranteed price in neighbouring Ghana.

The discrepancy has raised concerns that it could spark rampant cross-border smuggling, distorting production data and depriving Ivory Coast of vital revenue.

"From what we are hearing and seeing, this year smuggling in the east is less serious...Last year we financed coops in the east and they gave us our money back, because all the cocoa went to Ghana. This year is different," De Petter said.

"Ghana has a higher price, but the cedi (currency) has fallen 30 percent (since the start of the year), meaning Ghana's price isn't as high. And that is not encouraging contraband," he explained.