Ghana and Côte d’Ivoire are proposing that buyers of cocoa beans must pay a minimum of US$2,600 for every tonne of cocoa produced in the two countries.
The US$2,600 is the proposed floor price that the two countries, which account for 65 per cent of global cocoa supplies, are proposing to stakeholders in the value chain. Graphic Online understands that the two countries want to insist that neither of them will sell their produce on the global cocoa market should the price per tonne fall below the US$2,600 mark.
It was proposed to about 300 representatives of cocoa buyers, traders, processors and other industry players at a two-day stakeholder meeting in Accra on Tuesday.
When accepted and adopted, the amount will be the first-floor price to be set by the two top growers, bringing to an end the century-old pricing structure that makes cocoa producers price takers.
A formal decision on the floor price is expected to be announced on Wednesday, June 12, 2019, according to Graphic Online sources.
It is understood that the proposal could be adopted in its raw form or altered, depending on the outcomes of negotiations that are currently ongoing between officials of the two top cocoa growers and stakeholders in the value chain.
The International Cocoa Organisation quoted the price for a tonne of cocoa at US$2,436.08 as of the close of business on Monday, June 10.
Speaking at the first ever Stakeholder Engagement on Farmer Income in Accra on Tuesday 11th June, 2019, Vice President of Ghana, Mahamudu Bawumia, urged stakeholders in the cocoa value chain, including Trade Houses, Cocoa Processors and Chocolate Manufacturers, to join the Governments of Ghana and Cote d’Ivoire to address the high income disparity between farmers and the end users of cocoa products.
With 65% of global production, Ghana and Cote d’Ivoire are co-operating to tackle common challenges in the production and marketing of cocoa, and to create a conducive platform for effective engagement with traders, processors, manufacturers, and retailers on all relevant issues of mutual interest, including farmers’ income.
“It is startling to learn from the President of the World Cocoa Foundation that only 6 percent of total value of chocolate goes to farmers. The percentage may be lower in the case of cosmetics and pharmaceutical end uses” Vice President Bawumia stated.
“It is to this end that our governments (Ghana and Cote d’Ivoire) have agreed that we offer the farmer a fair share of the wealth that the industry generates. We must do this for good reason.”
Source: Daily Graphic, with additional comments.