Ivory Coast, the world’s highest exporter of cocoa has revoked the licences of two cocoa exporters who gave up their contracts after they were denied bank financing. The exporters Green & Brown and Tropicao, returned their licences to the Ivory Coast cocoa marketing board as they were heading for default due to a lack of financing.

This move is seen as a means to toughen conditions for awarding export licences to avoid a repeat of defaults that happened in 2016/17 season when the world market prices fell by 40 percent.

Several other small exporters in the country have been struggling to obtain funding from Ivorian banks, which lost money after top exporter SAF-Cacao one of several exporters with outstanding bank loans was liquidated over debts owed to the Coffee Cocoa Council in July last year. “Many small exporters are almost in default, so we are considering reselling their contracts,” an anonymous source revealed.

Ivory Coast sells forward most of its expected cocoa harvest to set a minimum price for farmers for the October-September season. The country’s regulator sold around 1.75 million tonnes of export contracts before the start of the 2018/19 season, allowing a guaranteed price of 750 CFA francs ($1.30) per kg of cocoa.

Read more at Reuters