GHANA – The Ghana Commodity Exchange (GCX) is pondering on listing light cocoa bean, which is mostly consumed by domestic processors on its trading platform in a bid to promote local consumption.
According to COCOBOD the industry regulator, about a third of Ghana’s annual cocoa beans output is processed domestically with a target to boost this share to 50 percent.
Reports by Business24 have indicated that the exchange does not trade cash crop contracts but plans to introduce a number of them in the coming years.
“In the medium-term period, we’re looking at bringing commodities such as the cash crops onto the trading floor of the exchange. We’re looking at also the possibility of trading the domestic cocoa here in Ghana—that is, the cocoa traded and used by processors here in Ghana,” Robert Dowuona Owoo, Chief Operating Officer of the GCX said.
He noted that the plan is currently at the discussion stage, which will involve all stakeholders, such as the cocoa marketing company, in deciding the standards and protocols to be adopted for the trading of the commodity.
“In the medium-term period, we’re looking at bringing commodities such as the cash crops onto the trading floor of the exchange.”Robert Dowuona Owoo – Chief Operating Officer of the GCX
Other than promoting local consumption of cocoa by availing the commodity on the floor of the exchange for easier access by domestic processors, the listing is also aimed to help determine the price on the international market.
This comes at a time when Ghana and neighbouring Ivory Coast are battling with international processors to adopt the newly introduced US$400 a tonne Living Income Differential (LID) fee on cocoa sales, aimed to combat farmers poverty.
Last year, Hershey’s, U.S.-based chocolate maker was accused of buying cheap beans from the New York futures exchange in an attempt to derail plans by the West African countries to increase farmers’ income.
To this end Ghana and Ivory Coast cancelled all cocoa sustainability schemes that the company was running in their countries.
The introduction of cocoa and other cash crops on the platform will also attract investment to GCX, especially as the government, which is presently the sole shareholder intends to divest its interest in the exchange.
“When cocoa is listed, the international interested parties will see premium in investing. Fortunately, government’s willingness to offload its shares in the exchange will make it even more attractive for international investors,” said Vice President of the Ghana Commodity Brokers Association, Jeffery Ntorinkansah.
The exchange is also in the preparation and approval process to allow trading of cashew contracts.
In December, GCX added rice contracts to the number of commodities traded on its electronic trading platform an addition to the maize, soya bean, sorghum and sesame contracts.
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