Soaring cocoa prices as Ghana and Côte d'Ivoire threaten to cut supply | Economic news

Cocoa prices rose sharply on Wednesday after major producers, Cote d 'Ivoire and Ghana, threatened to stop selling their produce to buyers reluctant to meet a minimum price.

The threat pushed the September futures contract for the New York-based commodity to $ 2,540 per tonne, up 1.4% on the day.

The two African countries, which together account for 60 percent of the world's cocoa production, convened buyers in Accra for a two-day meeting demanding a price of $ 2,600 per tonne.

At the end of the meeting, Joseph Boahen Aidoo, chief executive of the Ghana Cocoa Board, said at a press conference that their demands had been accepted in principle by the participants, but that there would be a follow-up meeting to determine implementation of the agreement.

"The Ivory Coast and Ghana have suspended the sale of the 2020/2021 crop until further notice in preparation for the implementation of the floor price," he said.

Describing the move as "historic," he said that "this is the first time that producers are calling consumers and the first time suppliers call buyers to engage with them. price, "he said.

"Over the years, it's the buyers who have determined the price of the suppliers."

A little earlier, on the sidelines of the meeting, Yves Kone, chief of the Ivory Coast Coffee and Cocoa Council, had stated that the industry needed a price equivalent to " a decent compensation "for the efforts of the workers.

The global cocoa market is worth about $ 100 billion, of which only $ 6 billion goes to producers.

Casper Burgering, commodity badyst at ABN Amro, told AFP that the current price hike could prove temporary, with supply being more than enough to meet global demand.

Another badyst at Commodafrica in Paris, however, said the drought in Ivory Coast could lead to a deficit in the next cocoa crop, exerting upward pressure on prices.