Price Agreement between Ivory Coast and Ghana causing "soaring cost of cocoa" – Mondelez

NEW YORK (Reuters) – A new cocoa pricing mechanism announced by major producers in Côte d 'Ivoire and Ghana earlier this month is driving up cocoa costs, Mondelez International Inc. said.MDLZ.O) A leader said Tuesday at a results conference with badysts.

"It's fair to say that, given some proposals from the Ivory Coast and Ghana, the cost of cocoa is skyrocketing," said Luca Zaramella, chief financial officer of the Oreo biscuit maker, whose headquarters is in Illinois.

Earlier this month, the two West African countries, which account for nearly two-thirds of global cocoa production, announced a "vital income differential" of $ 400 per tonne of cocoa for the 2020/2021 campaign to combat widespread poverty among farmers. This replaced an earlier proposal of an absolute floor price of $ 2,600 per tonne.

The New York CCC1 and LCCc2 London Cocoa Futures contracts reached peaks of about a year at the time of the price announcement but have since declined. Many market players do not know exactly how the new mechanism will be implemented.

"Concepts such as the vital income differential exert a slight pressure on the market. And the cost of cocoa has increased, "Zaramella told an badyst, refusing to comment on any company wishing to adjust the future prices of its products in Europe.