* High Ghana price to prompt smuggling from Ivory Coast
* Cocobod to protect Ghana reputation for premium beans
* Ghana to hold quarterly review to assess pricing mechanism
By Kwasi Kpodo and Sarah McFarlane
ACCRA/LONDON, Oct 8 (Reuters) - The high cocoa price recently set by Ghana is expected to stop the exodus of beans to neighbouring cocoa exporter Ivory Coast, but the world's number two cocoa grower is now on guard for an influx of foreign beans.
Traders estimated up to 100,000 tonnes, or about 15 percent of Ghana's 2009/10 crop, was smuggled over the border into Ivory Coast, where it fetched higher prices after the world cocoa market rallied to hit a 32-year high.
Smuggling has been an ongoing problem between the world's top two cocoa growers due to their different pricing structures; Ivory Coast has a free floating price, while Ghana's regulatory body Cocobod sets a fixed price paid to farmers each crop year.
Last week, Ghana increased its cocoa producer prices by 33 percent for the 2010/11 season, beating world number one grower Ivory Coast's farm gate prices, mainly to stop Ghanaian beans being smuggled out.
But the higher price could now attract foreign beans into Ghana, jeopardising its reputation as the world's top supplier of high quality cocoa.
"Although farm prices in Ivory Coast are not yet far enough below those in Ghana to induce substantial smuggling, 5,000 to 10,000 tonnes of the main crop might travel from Ivory Coast to Ghana at current prices," Steven Haws of Commodities Risk Analysis (CRA) said, referring to the 2010/11 main crop harvest which officially began on October 1.
Yaw Adu-Ampomah, deputy chief executive of Cocobod, said while the new prices were attractive and could lead to cocoa being smuggled into Ghana, Cocobod plans to protect the premium quality of its beans and would not allow foreign produce to mix its stock.
"We have built a reputation for our cocoa for so many years and there's need to guard it jealously," Adu-Ampomah said. But analysts expect those smuggling cocoa into Ghana from Ivory Coast will bear in mind Ghana's quality requirements.
"Because of Ghana's quality controls, one must bring high quality beans to Ghana. Buyers will sort the cocoa in Ivory Coast and bring over only the best," CRA's Haws said.
Another market analyst estimated farmers in the Ivory Coast are being paid around $500 a tonne less for their cocoa than farmers in Ghana.
Ghana's set cocoa price is around $2,246 a tonne. "This week we were getting 800 CFA francs (equivalent to $1,690 per tonne) for the price in the bush and even the exporters are not getting much more than 950 CFA for it," Attoungbre Kouame, farmer in Daloa, heart of the Ivory Coast's cocoa belt said.
NYSE Liffe cocoa prices have fallen some 25 percent in recent months to trade at 1,862 pounds a tonne ($2,947) at 0916 GMT, from the 32-year peak of 2,465 pounds a tonne hit in July.
Improving crop prospects in West Africa contributed to the sharp fall in the London-based futures prices and analysts said if prices on the world market continue to weaken, Ghana's high fixed price could attract more cocoa across its borders.
"Cocobod will be acutely conscious of the recent collapse in international prices and will be keen to avoid over-paying local farmers," Gary Mead of VM Group said.
ABN AMRO Bank N.V./VM Group expect world 2010/11 cocoa output will rise to 3.75 million tonnes, from 3.52 million tonnes the previous year.
PRICING REFORM
Some analysts believe Ghana and Ivory Coast will eventually harmonise their pricing policies to address the smuggling issue.
For a factbox on the differences between the two grower's pricing structures see.
Both countries are looking at ways to ensure tighter controls and shore up cocoa industry revenues.
During the 2009/10 crop year Cocobod reviewed the farm gate price mid-season after it became clear that their fixed price was uncompetitive with going rates in neighbouring Ivory Coast and Togo, triggering a wave of smuggling.
Cocobod now plans for a joint committee to meet on a quarterly basis to discuss market conditions and its pricing.
"The idea is to be holding quarterly review meetings to assess our pricing mechanism - and in December we may be looking at issues such as hauliers' margin as a result of general price increases and other developments in the economy which may one way or the other affect our industry," Cocobod's Adu-Ampomah said.
Meanwhile Ivory Coast has been exploring the option of returning to a fixed price structure for some time, but with an election looming, no change is expected in the near future.
"It's possible Ivory Coast could put a floor in prices. More government intervention into the cocoa marketing would be welcomed at least by the farmers, but whether it happens depends on what happens with the election," a London-based trader said. (Additional reporting by Tim Cocks and Loucoumane Coulibaly in Abidjan; Editing by Jon Hemming)