Cocoa traders shun Ivory Coast auction The world's largest cocoa traders have boycotted the Ivory Coast government's first cocoa auction, a move that raised concerns about reforms in the biggest producer of the commodity. Cocoa industry leaders were caught by surprise last Thursday when they were invited to take part in an auction to sell part of Ivory Coast's next crop, to be harvested in 2012-13. The announcement came amid negotiations between the large cocoa exporters and processors on the details of the sale process designed to revive Ivory Coast's cocoa production. "None of the exporters participated," said one large international cocoa trader. There are still discussions around the reforms continuing, to see how both sides can take the process forward. The Ivory Coast government under President Alassane Ouattara had proposed reform of the trading and pricing of cocoa. The commodity is the main source of income for the Ivorian government, which came into power last year. Officials had been studying government involvement in sales in neighbouring Ghana, which has a well-established centralised system where the crop for next season is sold to middlemen. The Ivorian reforms include a cocoa auction, which allows a cocoa regulator to set a guaranteed price for farmers. Under the proposals, the export price of cocoa is also set centrally, and exporters and operators who want to buy the crop need to pay the regulator a deposit. Traders said negotiations over the pricing mechanism, including the deposit, were far from being resolved. "It would be far better that [the Ivorian authorities] had the agreement of the market before announcing the auctions open, as it will be embarrassing that every major player cannot possibly participate while the disagreements remain," said one commodities investor. Another issue is that traders are buying contracts for the next season's crop. Unlike transactions on the "spot" market, where delivery is almost immediate, many traders and exporters are uncertain about taking on the risk by paying for products which they can only lay their hands on later in the year. The Ivory Coast accounts for about 40 per cent of the world's total production and uncertainty surrounding the country's marketing reforms has been one of the factors weighing on the cocoa market over the past few months. Investors and traders have been worried about the extra supply from next season coming on to the market, especially amid the absence of information about how the Ivorian beans would be auctioned. Prices in London declined 6.7 per cent on Friday and Monday, after the news of the auctions spread. Reports that exporters had not taken part brought some relief and cocoa for May delivery rose 0.6 per cent to £1,513 a tonne.