Côte d’Ivoire and Ghana bend cocoa traders to get a better price
A thunderbolt in the cocoa world: Côte d’Ivoire and Ghana, the world’s two leading bean producers, announced on Wednesday June 12 in Accra that they would no longer sell their cocoa for less than $2,600 per tonne. An ultimatum that the sector’s traders, in a weak position, accepted.
In the meantime, and until a final agreement is reached, both countries have confirmed that they will suspend their sales of cocoa for the next season in 2020-2021 (harvests are usually sold before the beginning of each season, Editor’s note). A « historic » decision, greeted the Executive Director of the Ghana Cocoa Board (Cocobod), Joseph Boahen Aidoo, after two days of meetings between producers, traders and politicians, and very broadly endorsed by the main beneficiaries, producers. Yves Brahima Koné, Director General of the Cocoa Coffee Council of Côte d’Ivoire, attended these meetings and recalled that the aim was to « obtain from industrialists and other partners in the sector a price that could remunerate human labour in a decent way ». For the time being, the balance of power seems rather favourable to cocoa farmers, traders and processors who have accepted - in principle - the proposed floor price of $2,600 per tonne. However, they requested a further meeting, this time a technical one on 3 July, to discuss in detail the conditions for its implementation. Quoted by AFP, the Executive Director of the International Cocoa Organization (ICCO), Michel Arrion, cautious, warned that « the increase in the price on the world market would not necessarily go into the pockets of producers ».
Read also : The interview with Michel Arrion, Executive Director of ICCO
The Ivorian-Ghanaian coup de force in any case gives credit to the new strategic alliance between the two global giants in the cocoa sector (62% of world production), initiated in 2018 and which aims to have a greater impact on international prices. As the latest Cocoa Barometer, an annual sector study funded by a consortium of NGOs (Oxfam, Südwind Institute, Public Eye…), points out, cocoa producers would receive on average only 6.6% of the revenues generated over the entire value chain. On the markets, the announcement helped push up the price of cocoa, which was trading Thursday at around $2,550 per tonne in New York, an annual high.
Source : Bloomberg