Exporters in West Africa are up in arms about a pending change in shipping methods to Europe which they say could have an impact on the quality of cocoa arriving in European ports.
Shipping companies which are members of the Europe West Africa Trade Agreement (EWATA) will no longer accept liability for damage to cocoa in transit starting from October, industry sources told Reuters this week.
"If they're really not going to take responsibility for the products they're shipping, that could have an effect on quality," an exporter said.
Transporters currently bear the responsibility for ensuring cocoa arrives with buyers in Europe in the same condition as it was dispatched by exporters at ports in the countries of origin - mainly Ivory Coast, Ghana and Nigeria for West Africa.
In a letter to members of the Federation of Cocoa Commerce (FCC) from its chief executive Philip Sigley, he said shipping companies would stop their quality guarantees from October 1, which marks the start of the 2005/06 marketing season. "Unfortunately, the EWATA members have confirmed, independently of the positions of their cocoa clients, that they will proceed with (this change) from the next cocoa season," the letter said.
Sigley said shipping firms took the decision because compensation claims for damaged cocoa had risen and driven up their costs, but he told Reuters the FCC would try to negotiate with the companies to reverse or relax their new rules.
The director of a European exporting firm in Abidjan said the transporters' aim was to get rid of costly ventilated containers which are mostly used for cocoa and coffee, meaning they are often empty and unprofitable on return trips to Africa.
"EWATA never involved (exporters) in this (decision) and wants to use this change to get rid of their ventilated containers because they cost a lot but these are what we use to ensure quality," he said.
He added the unventilated containers the industry would have to use instead were less suitable for cocoa transport because there was no way to control humidity levels, meaning beans were more likely to grow mouldy if journeys were longer than planned.
"It takes 12 or 13 days for a ship to arrive in Europe when it leaves the African ports but usually it takes longer because of congestion and delays at the ports.
"In that situation, how can we guarantee quality when (the cocoa) arrives with the customer?" he said.
The FCC is working with Cocoa Research UK to find a safe way to use unventilated containers for cocoa shipments, Sigley's letter said. That could make it easier and less costly for exporters to arrange insurance cover for the loads.
Sigley said in his letter that one option for exporters would be to pay a premium for cocoa with moisture levels up to a limit of 7.5 percent, to encourage farmers and buyers to dry beans properly and minimise the risk of damage in transit.
The director of another European exporter in the world's top cocoa grower said the changes would require investing time and money to teach farmers and buyers how to produce higher quality and properly dried cocoa that would be less risky to ship.
"(That) can't be done in one season. It's a job which will take time and require a lot of money that no one will be willing to pay up on their own," he said, adding that the financial burden of the new rules would inevitably fall upon farmers.