By Ange Aboa

DUEKOUE, Ivory Coast, Oct 30 (Reuters) - Cocoa smuggling from the rebel-held north of world top cocoa grower Ivory Coast continues despite a peace deal intended to reunite the West African country, merchants say.

The rebel New Forces who seized the northern half of the country in a 2002-2003 civil war have long acknowledged using revenue from cocoa smuggled through their zone to neighbouring countries to fund their movement.

But in spite of a March peace deal that led President Laurent Gbagbo to make New Forces chief Guillaume Soro prime minister, truckloads of beans still roll over the northern border.

"No one told us to stop sending cocoa through Burkina Faso, Guinea or elsewhere and it's not because of peace that it's going to stop. We'll send our cocoa wherever the price is good," cocoa merchant Falikou Cisse said.

He is one of many buyers working in Fengolo, a village just north of Duekoue in Ivory Coast's main western cocoa belt.

Merchants send cocoa grown around Fengolo, including some grown in the government south as well as in the rebel zone, to neighbouring states as New Forces taxes are much lower than those payable to the state at the country's two sea ports.

These lower taxes enable smugglers to outbid other merchants working in this area and that has forced some cooperatives and independent buyers out of business.

"We buy cocoa here at 450-465 CFA ($0.99-$1.02) per kg and sell it in Man or Vavoua (rebel zone) at 515-520 CFA," Cisse said. He said other merchants could only offer around 380 CFA because they would get only 450-470 CFA at the ports.

TAX INCENTIVE

Fengolo lies in what was until recently a U.N.-patrolled buffer zone which rebel and government combatants were forbidden from entering, but U.N. checkpoints have since been dismantled to make way for joint government-rebel brigades.

The town is far enough north to avoid roadblocks manned by government troops who extort money to allow trucks through.

A report this year by anti-graft campaign group Global Witness, which examined how cocoa revenues had been used to finance conflict in the country, estimated at least 77,500 tonnes of cocoa were exported through the rebel-held north.

Merchants sending cocoa this way said their main cost was a 150 CFA franc per kg tax payable to the New Forces for which they receive a waiver document to show at roadblocks. They said extortion was less costly than in the southern half.

State taxes and industry levies on cocoa exported through the ports total 269 CFA francs ($0.59) per kg and one Fengolo merchant, Hamed Yeo, said large trucks had to pay bribes of 300,000-400,000 CFA to government soldiers on their way there.

Merchant Seydou Konate used to work in Duekoue but has been sending his cocoa north from Fengolo for the last two seasons, saying it is the only way he can make a living as a cocoa buyer.

"I was making losses every day, that's why I left and came here," he said, adding he was able to buy his own pick-up truck with the profits he made last season.

"If you don't offer good prices you don't can't get cocoa. It's like that. That's the rule and because of that many merchants and cooperatives have closed because of their losses."

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