Smuggling pads Ghana's record cocoa harvest

* About 100,000 T smuggled in from Ivory Coast this year

* Same volumes went in the opposite direction a year ago

* Good weather boosts regional output

By Richard Valdmanis

DAKAR, May 10 (Reuters) - More than two-thirds of Ghana's increase in cocoa output this season comes from a reversal of smuggling flows between it and Ivory Coast, casting doubt on the No. 2 grower's agricultural success story.

The West African nation expects official output of around 920,000 tonnes during the 2010-11 crop, a surge from the 632,000 tonnes posted last season that could ease the blow of export delays from crisis-stricken Ivory Coast.

While Ghanaian officials have attributed the increase to new farming techniques and good weather, analysts said a reversal of smuggling flows with Ivory Coast could make up about 200,000 tonnes of the year-on year change.

That would damp projections for a broader regional cocoa output boost driven by ideal weather. West Africa grows two-thirds of the world's cocoa, and disruptions in top grower Ivory Coast drove prices to record highs.

Some 100,000 tonnes of beans have been secreted from Ivory Coast into Ghana since a violent post-election power struggle froze exports for months, shippers and analysts said, a year after the same volume was smuggled the other way.

"Normally you would see cocoa being smuggled from Ghana to Ivory Coast, because of the price difference," said Cole Martin of Business Monitor International. He said this year he expected some 100,000 tonnes had crossed the other way.

Two purchases directors for cocoa export companies -- one based in Ivory Coast and the other in Ghana -- said the Ghana-bound smuggling from Ivory Coast amounted to at least 100,000 tonnes this season.

"We are aware of the traffic, and we estimate between 100,000 and 150,000 tonnes of beans have crossed over so far," said one of the exporters.

Ghanaian officials have denied significant smuggling this year, but have declined to give an estimate.

"We don't have an official figure but all we know is that it is very, very insignificant," said Deputy Cocobod Chief Executive Yaw Adu-Ampomah of the smuggling. "We started implementing a new strategy to improved the crop more than three years ago and now we are seeing the results. Fortunately, for us, the weather has also been very good," he said.

SMUGGLING PATHS

Ivory Coast cascaded into crisis after presedential incumbent Laurent Gbagbo refused to cede power to election winner Alassane Ouattara, sparking an all-out conflict that only eased in April with Gbagbo's arrest.

Cocoa shipments from Ivory Coast resumed over the weekend after they were frozen since late January by an export ban and European Union sanctions on the ports designed to starve Gbagbo of funds and shake his grip on power.

Ivorian cocoa farmers said the crisis had opened up smuggling routes into Ghana from as far as western Ivory Coast towns Daloa, Gagnoa and Bouafle in the heart of the cocoa belt, as planters desperate for cash sought the only available market.

"People moved cocoa through Yamasoukro, then Dimboro and Bongouanou to head east," said Attoungbre Kouame, a farmer in Daloa. "When everything was blocked here, we saw Ghanaian purchasers taking on the beans," he said.

While the reopening of the ports will likely slow smuggling through the rest of the season, farmers in Ivory Coast's eastern growing regions said good prices in Ghana were still fuelling illicit shipments.

"Sales to Ghana continue. Trucks unload bags at the border and people then carry then in on their heads or by motorbike to get them into Ghana," said Emile Yao, a farmer in the southeast region of Aboisso.

"From our village, we see close to 15 trucks each day," said Joseph Amani, whose farm is 15 km from Ghana's frontier.

Ivory Coast farmgate prices were running about 600 CFA francs ($1.31) per kilogram this week, compared to the roughly 750 CFA per kg being offered in Ghana, farmers said.

PERFECT WEATHER

Despite the impact of reversed smuggling routes on Ghana's crop this season, analysts said the country was still managing substantial increases in its domestic output and that the region as a whole was benefitting from good weather.

"The bulk of the increase in output from Ghana this year is the result of unusually good weather, which has also benefitted other West African growers," said Steven Haws at Commodities Risk Analysis in New York.

Analysts have projected that West Africa output is poised to hit its highest level in at least six years at around 2.6 million tonnes this season on the back of expected increases in Ghana and Ivory Coast, as well as potential additional volumes from Cameroon and Nigeria.

Ivory Coast's top agricultural official said he expected the country to stick to its output target of 1.3 million tonnes despite its crisis, marking a boost from last year's roughly 1.24 million.

"We do not know the impact of this crisis, but I don't think the crisis unfolded in the agricultural zones. It was mainly in the towns," acting agriculture minister Gnamien Konan said.

($1=459.9 Cfa Franc)

(Additional reporting by Ange Aboa and Loucoumane Coulibaly in Abidjan and Kwasi Kpodo in Accra)

(SOurce: http://af.reuters.com/article/ivoryCoastNews/idAFLDE7441F020110510?sp=true)