In yet another twist, the world’s two leading cocoa producers have decided to lift the suspension of their brown gold sales, announced in mid-June. The news, published by press release, fell on the evening of Tuesday, July 16.
In this text, the Executive Director of the Coffee and Cocoa Council of Côte d’Ivoire (CCC), Yves Brahima Koné, and the Executive Head of the Ghana Cocoa Board (Cocobod), Joseph Boahen Aidoo, announced laconically that « the two countries have decided to lift the suspension of sales for the 2020/2021 harvest as from 16 July ». A « retreat » that contrasts with the martial tone adopted until recently by the national leaders of the cocoa sectors. Addressing the sector’s industrialists, the owner of the Ghanaian Cocobod, Joseph Boahen Aidoo, did not hesitate, at the beginning of July, to inform them that « if they[wanted] not to pay the price (charged), they[could] go elsewhere ». Since then, the dynamics of the balance of power has apparently changed.
It all started with a bold poker move. On 12 June, by a decision described as « historic », Côte d’Ivoire and Ghana announced that they would no longer sell their cocoa below $2,600/tonne, the primary objective being to improve farmers’ wages. « We wanted our producers to no longer live according to the market and to make a decent living from their work, » said Yves Koné, Executive Director of the Ivorian CCC.
n fact, as recalled in the latest household survey conducted by the Ivorian government in 2014/2015, 54.9% of the country’s cocoa farmers are reported to live below the national poverty line, with less than 757 CFA francs ($1.2) per day. This unflattering situation is corroborated by a study by the International Finance Corporation, according to which only 7% of the value added generated by the cocoa sector is captured by producers themselves (see graph below).
The ultimatum of the two countries – which represent 65% of the world’s cocoa supply -, although not without political ulterior motives*, was therefore laudable and the sector’s traders first accepted the principle. However, the hope of quickly bringing these major operators to their knees was never realized.
The meeting between the representatives of the two world leaders in cocoa and the manufacturers of the sector, held on 3 July in Abidjan, did not result in any agreement, as the majority of the latter refused to bear the risks linked to price fluctuations alone, to the great displeasure of farmers. Concerned to keep all options open, and perhaps feeling (already) the need to gain flexibility, the Ivorian-Ghanaian authorities immediately indicated that they would initiate new meetings with the stakeholders in the sector. The announcement by Côte d’Ivoire and Ghana of the resumption of cocoa sales now sounds like an admission of failure and could end as the « cocoa war » of the 1980s in pain. At the time, the late President of Côte d’Ivoire, Felix Houphouët-Boigny, stopped exports in the hope of boosting prices. In vain. After sixteen months of battle « against the occult market forces », the Ivorian authorities finally decided to sell their cocoa beans at a discount price.
*Both countries are preparing for a presidential election in autumn 2020, a period when the cocoa harvest will begin.