Producers and buyers of cocoa can not agree on a floor price of 2,600 USD

Company News of Friday, July 5th, 2019

Source: thebftonline.com

2019-07-05

The two largest cocoa producers – Ghana and Côte d'Ivoire – have failed to agree on a floor price with major buyers and manufacturers of cocoa beans at A meeting held in Abidjan, Côte d'Ivoire.

The two countries, which produce 60% of the world's cocoa beans, previously proposed a floor price of USD 2,600 per tonne of cocoa (free on board) – below which they will not sell the product for the 2020/2021 season. – at a first meeting between producers and buyers in the Ghanaian capital, Accra.

The meeting in Abidjan – attended by leading chocolate companies such as Hershey, Mars Inc., Blommer Chocolate, Cemoi, SucDen, Mondelez International, Touton, Barry Callebaut, Cargill, Olam International and Ecom Trading – was intended to further discuss the proposed price. perhaps agree on a possible implementation during the 2020/2021 agricultural campaign.

John Ament, global vice president of Cocoa for Mars, told Reuters: "We support the steps taken by governments to step in to obtain a higher price that will lead to a sustainable increase in the price of oil." farmer".

After the meeting in Abidjan, a company official who requested anonymity told Reuters: "The mechanism that Ghana and Côte d'Ivoire have proposed to us still lacks clarity and precision for its adequate implementation, so more meetings will have to be organized, "said one

Joseph Boahen Aidoo, CEO of the Ghana Cocoa Board, believes, however, that the price offered is essential to guarantee farmers a basic salary and an improvement in their living conditions.

At a press conference, Boahen Aidoo said: "They do not have to accept because it's a free market. If they do not want to pay the price we offer, they can go elsewhere. "

The cocoa industry has contributed significantly to Ghana's economic development over the years. Cocoa accounts for about a quarter of Ghana's gross domestic product (GDP).

Over the years, the industry has created jobs for millions of Ghanaians and is a major source of foreign exchange for the country.

However, poor prices have left many cocoa farmers barely able to adequately meet the needs of their families and, more importantly, have made the industry unattractive to much of the youth.

One of the main functions of Ghana Cocoa Board (Cocobod) is to buy, market and export cocoa and cocoa products produced in Ghana. In recent years, the price of cocoa on the international market has fluctuated.

The average fob cocoa price recorded during the 2017/2018 season was USD 2,080, a sharp drop from USD 2,950 per tonne the year before.

This drop in prices coincided with a significant increase in cocoa production – more than 120 000 tonnes more than the 850 000 tonnes forecast for the 2016/17 season, which remained above 900 000 tonnes for the 2017 / Following 2018.