Ghana and Cote d'Ivoire to suspend sale of cocoa – They want buyers not to be the only ones to set prices

Cote d'Ivoire and Ghana, the world's top two producers, announced Wednesday they would no longer sell their cocoa at less than USD 2,600 a tonne, a "landmark" decision presented as a way to better pay farmers, AFP reports.

– What happened in these two days is historic – said Ghana Cocoa Board CEO Joseph Boahen Aidoo after two days of meetings between producers, traders and policymakers.

– For years, buyers have determined prices. To try to turn the tide, Cote d'Ivoire and Ghana have suspended the sale of the 2020/2021 crops until further notice to prepare the introduction of this minimum price – he said. .

This was approved, in principle, by participants - producers and traders, he said.

An upcoming meeting is scheduled to take place on July 3 in Abidjan to discuss the implementation of this measure.

Of the USD 100 billion in the global cocoa market, only USD 6 billion goes to farmers, which is an unreasonable situation, said the Vice President of Ghana, Mahamudu Bawumia.

– That's why our governments have agreed to give farmers a fair share of the wealth produced by the industry. A fair price of cocoa beans would be a great help to support government investments in rural infrastructure, and to improve living conditions – he added.

"Brown gold" accounts for 10% of Cote d'Ivoire's GDP, and slightly less for Ghana.

For the International Cocoa Organization (ICCO), the consensus exists "to say that cocoa prices are structurally too low. For 30 years, the price in constant dollars has been divided by four," Michel Arrion, its executive director, told AFP.

But if the price of 2,600 dollars "is not unrealistic", according to him, "the rise in the price on the world market will not necessarily go into the pockets of producers", who live in "extreme poverty".

In the markets, this meeting has contributed to the rise in the price of cocoa, which reached Wednesday in session 2,552 dollars per ton in New York.

However, the rise could be temporary, warns Casper Burgering, commodity analyst for the Dutch bank ABN Amro, joined by AFP, as "for the moment, there is clearly enough cocoa to meet the demand," he said, and "since the introduction of this price floor will take a year, more or less, there is a risk that current prices will come down again ".

International Cocoa Organization

ICCO

Michel Arrion

Joseph Boahen Aidoo

Mahamudu Bawumia

cocoa

exporting cocoa

suspension of sale of cocoa