(Bloomberg) -- Ivory Coast is asking buyers to wait for the so-called midcrop harvest to get delivery of about 130,000 tons of cocoa beans, the latest sign of how scarce supplies are in the world’s top producer. 

The decision to “roll over” the contracts to the harvest that just started was taken by the regulator this week, according to people familiar with the situation.  

With cocoa prices surging in London and New York and beans scarce because of disease and bad weather, the West African nation has taken a series of increasingly desperate steps to fulfill its contracts. The government is cracking down on exporters and smugglers to prevent them from exacerbating the situation. 

Shifting contracts to the midcrop means that the nation’s unmet cocoa exports — plus the volume already sold to local grinders — is now riding on the smaller harvest, which ends in September. Ivory Coast’s exports of the key chocolate ingredient are down almost 28% from the previous season, spurring intense competition for beans. 

Output during the main harvest, which ran from October through March, fell short of the volumes the regulator pre-sold to traders, triggering a bidding war for beans. 

Yves Kone, managing director of the authority — Le Conseil Cafe-Cacao — declined to comment on the deferred volume, but said that rollovers are standard procedure.

Cocoa futures hit a fresh record above $10,300 a ton earlier this week. The global market tightness has created extreme premiums for near-term contracts over those for delivery at a later date. While the lack of beans is what first pushed prices higher, since then the mechanics of the futures market have created a vicious cycle with margin calls and forced buying putting traders under stress.

Read More: The Surge in the Price of Chocolate Is Only Getting Started

Deterring Smugglers

The CCC last month threatened to fine exporters who pay above market rates for beans delivered to their facilities. Ivory Coast also recently overhauled its border security with Liberia and Guinea and increased its pay to farmers in an effort to deter the smuggling to those nations, where bean prices are as much as three times as high. 

Farmers this week started reaping the smaller harvest, though it’s not yet clear how much it will soothe a global market that’s hungry for more supply. The CCC expects the midcrop — often reserved for local processors — to shrink at least 17% to between 400,000 and 500,000 tons, Bloomberg previously reported. 

Under local rules, exporters can face penalties if they don’t buy the volumes they pre-booked. For now, traders won’t be penalized due to the current shortfall, but they are required to source beans and cover their unmet contracts by June 30, according to the CCC. 

Some cocoa merchants are wary the midcrop won’t be enough to cover all contracts sold for entire 2023-24 season, adding to concerns that local exporters may default on their supply obligations, a major trader said.

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