Ghana, Cote d’Ivoire suspend cocoa beans sales, propose higher maiden floor price

GHANA – Ghana and Cote d’Ivoire have suspended the sale of cocoa beans to the open market under the 2020/2021 crop season until further notice.

The suspension was announced in Accra, Ghana by the two countries to about 300 stakeholders in the cocoa value chain, comprising traders, processors and chocolate manufacturers, reports Ghana Web.

As the world’s leading cocoa suppliers with a combined market share of more than 65 per cent of global cocoa figures, the move seeks to ensure stakeholders in the value chain give farmers a fair price that reflects their contribution to the sustenance of the cocoa industry.

The gesture, which is the first of its kind by the world’s top two cocoa growers, is also meant to put pressure on stakeholders to adopt a floor price for the soft crop.

Ghana and Côte d’Ivoire are proposing that buyers of cocoa beans must pay a minimum of US$2,600 for every tonne of cocoa produced in the two countries.

This represents a 6% increase benchmarked against the International Cocoa Organisation which quoted the price for a tonne of cocoa at US$2,436.08 as of the close of business on Monday, June 10

Under the arrangement for a floor price, the two countries have said that none of them will sell their produce in the international market below the agreed minimum price.

When accepted and adopted, the amount will be the first-floor price to be set by the two top growers, bringing to an end the century-old pricing structure that makes cocoa producers price takers.

Indications are that the proposal could be adopted in its raw form or altered, depending on the outcomes of negotiations that are currently ongoing between officials of the two top cocoa growers and stakeholders in the value chain.

The two countries last year unveiled plans to coordinate cocoa production and marketing as part of efforts to exert more control in the market after price volatilities in recent years

Despite supply more than 60 percent of cocoa to the global market, Ghana and Cote d’Iviore only generate US$6 billion annually in the US$100 billion-dollar chocolate industry.

It is on that basis the two largest producers of the commodity through their regulators, Ghana Cocoa Board and Le Conseil du Café-Cocao of Cote d’Ivoire, made a declaration in 2018 in Cote d’Ivoire for bilateral partnership to have a greater stake in determining the prices of cocoa.

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