IVC: Rising cashew demand fuels smuggling from Ivory Coast

Rising demand for cashew nuts has fueled smuggling from Ivory Coast to Ghana and other countries, damaging the quality of exports from the world's top producer, farmers and exporters said on Tuesday.

Ivory Coast is on track to produce a record 715,000 tonnes of raw cashews this year thanks to good weather, but exporters estimate that about 100,000 tonnes, including the best-quality nuts, could be smuggled out of the country.

Cashews are primarily smuggled to Ghana and in smaller amounts to Burkina Faso and Mali. Smuggling happens every year but has grown more profitable, and thus more common, this season, farmers said.

Ghana does not tax cashew exports, while Ivory Coast charges 85 CFA francs ($0.14) per kilogram. Transit costs in Ivory Coast are also double those in Ghana, an Ivory Coast-based exporter said.

"The government has to do something about this quickly ... All the quality material is going to neighboring countries (illegally)," the exporter said. "It's putting the entire sector in danger."

He estimated that nearly 40,000 tonnes of cashews have crossed the borders already and that about 100,000 tonnes will be smuggled out this season.

Another exporter estimated that 120,000 tonnes are smuggled out each year, but said it was too soon to know for this season.

Cashew prices have increased in Ivory Coast and elsewhere on demand that has been rising for several years.

Ivory Coast's government set a minimum farmgate price of 440 CFA francs per kg for the 2017 marketing season, which began in mid-February, up from 350 CFA francs last year.

But farmers said they are making 650 to 800 CFA francs per kg, and in eastern regions the nuts are being resold to Ghanaian buyers for 900 to 1,000 francs per kg.

In the eastern region of Abengourou, even cocoa farmers are smuggling cashews, farmers said.

Ivory Coast was already the world's top cocoa producer before passing India to become the top cashew producer in 2015.

"Cocoa farmers are organizing to buy (cashews) around Bondoukou and sell them to the Ghanaians. Every day there are dozens of trucks that cross the border," said Lambert Koffi, a cocoa farmer in Abengourou.

An official at a major export company said the high demand is driven primarily by India and Vietnam, which buy the majority of cashew exports from Ivory Coast.

(Additional reporting by Joe Bavier; Writing by Nellie Peyton; Editing by David Goodman)

Source: http://mobile.reuters.com/article/idUSKBN16S29Y