AGL 40.00 No Change ▼ 0.00 (0%)
AIRLINK 129.06 Decreased By ▼ -0.47 (-0.36%)
BOP 6.75 Increased By ▲ 0.07 (1.05%)
CNERGY 4.49 Decreased By ▼ -0.14 (-3.02%)
DCL 8.55 Decreased By ▼ -0.39 (-4.36%)
DFML 40.82 Decreased By ▼ -0.87 (-2.09%)
DGKC 80.96 Decreased By ▼ -2.81 (-3.35%)
FCCL 32.77 No Change ▼ 0.00 (0%)
FFBL 74.43 Decreased By ▼ -1.04 (-1.38%)
FFL 11.74 Increased By ▲ 0.27 (2.35%)
HUBC 109.58 Decreased By ▼ -0.97 (-0.88%)
HUMNL 13.75 Decreased By ▼ -0.81 (-5.56%)
KEL 5.31 Decreased By ▼ -0.08 (-1.48%)
KOSM 7.72 Decreased By ▼ -0.68 (-8.1%)
MLCF 38.60 Decreased By ▼ -1.19 (-2.99%)
NBP 63.51 Increased By ▲ 3.22 (5.34%)
OGDC 194.69 Decreased By ▼ -4.97 (-2.49%)
PAEL 25.71 Decreased By ▼ -0.94 (-3.53%)
PIBTL 7.39 Decreased By ▼ -0.27 (-3.52%)
PPL 155.45 Decreased By ▼ -2.47 (-1.56%)
PRL 25.79 Decreased By ▼ -0.94 (-3.52%)
PTC 17.50 Decreased By ▼ -0.96 (-5.2%)
SEARL 78.65 Decreased By ▼ -3.79 (-4.6%)
TELE 7.86 Decreased By ▼ -0.45 (-5.42%)
TOMCL 33.73 Decreased By ▼ -0.78 (-2.26%)
TPLP 8.40 Decreased By ▼ -0.66 (-7.28%)
TREET 16.27 Decreased By ▼ -1.20 (-6.87%)
TRG 58.22 Decreased By ▼ -3.10 (-5.06%)
UNITY 27.49 Increased By ▲ 0.06 (0.22%)
WTL 1.39 Increased By ▲ 0.01 (0.72%)
BR100 10,445 Increased By 38.5 (0.37%)
BR30 31,189 Decreased By -523.9 (-1.65%)
KSE100 97,798 Increased By 469.8 (0.48%)
KSE30 30,481 Increased By 288.3 (0.95%)

Ivory Coast will abolish a 20-year-old tax break given to local cocoa grinders when the 2012/13 season starts on October 1, an official with the top grower's marketing board told Reuters on Saturday, in a victory for exporters who don't grind locally. The move was announced at a board meeting of the Coffee and Cocoa Council (CCC) late on Friday during which the body also decided to increase a key transportation-reimbursement allowance at the heart of a row threatening reform of the sector.
Exporters Cargill, Barry Callebaut, CEMOI and ADM, who process a portion of their cocoa domestically, all benefit from a reduced DUS ("droit unique de sortie") tax - the main cocoa export tax - and stand to lose if the tax break is scrapped. Rival exporters say the subsidy gives the grinders an unfair advantage and cost Ivory Coast 34 billion CFA francs ($67 million) in 2010. Farmers argue that this lost tax money should have been reinvested in the sector.
"The president of the (CCC) informed the board of directors of the government's decision to totally repeal the fiscal advantage given to cocoa grinders," a board member told Reuters, asking not to be named. The government introduced tax incentives for local grinders during the 1991/1992 cocoa season to encourage investment in the country, create jobs in the cocoa sector, and increase grinding capacity.
Initially meant to last five years and apply only to exports during the April to September mid-crop, the incentives are now granted year-round and are currently worth about 75 CFA francs ($0.14) per kilogram of cocoa. In 2010, Ivory Coast became the world's top cocoa grinder with a capacity of 532,000 tonnes, turned mainly into cocoa butter and powder.
As part of a sweeping reform of the cocoa sector, the government is aiming to locally grind half of its cocoa bean production by 2015. Currently around 35 percent of beans are processed locally. Cocoa grinders have however said the incentives do not give them any special advantage and that removing them could hurt the local grinding industry and even push some to move plants to neighbouring Ghana, the world's second-biggest producer after Ivory Coast. The new cocoa season opens next month under a government-led scheme that uses the proceeds from forward-selling of the crop to guarantee prices for farmers and encourage them to reinvest in their plantations.
The Coffee and Cocoa Council (CCC) is due within days to set a farmgate price, as well as a scale of cost reimbursement for exporters, including handling costs incurred to get the beans from farm to port. But exporter and merchant groups have said that if the anticipated transportation and collection cost allowances are not increased, they will ignore the government's farmgate price.

Copyright Reuters, 2012

Comments

Comments are closed.