Ghana, Ivory Coast consider suspending cocoa beans trading

Two of the world’s largest cocoa beans producers, Ghana and Ivory Coast, are considering suspending trading the cash crop for the 2020/2021 crop season.

The two countries, who have harmonised their trading systems as part of an agreement between them to push for a say in determination of the floor price of cocoa, announced the joint decision at the first-ever gathering of cocoa stakeholders in Accra.

In attendance were major players in the value chain: such as Mars Wrigley Confectionery, Nestlé, Pladis, Mondelēz International, Ferrero Rocher and Lindt & Sprüngli AG.

Vice-President Dr. Mahamudu Bawumia urged leading cocoa producer countries and stakeholders in the global cocoa supply chain to strive to reach a consensus at the Accra meeting.

“We have to show commitment to help tackle the issue and guarantee a living income for farmers beyond the mere poverty level. We need to develop an agenda and a roadmap for tackling this challenge. We are hopeful of achieving a consensus with you on this subject.

“The governments of Ghana and Cote d’Ivoire are united to achieve better living standards for cocoa producers and instil efficiency into our domestic supply chains,” he said.

He added that: “It is startling to learn from the President of the World Cocoa Foundation that only 6% of the total value of chocolate goes to farmers. The percentage may be lower in the case of cosmetics and pharmaceutical end users. 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”.

See Also:  Modification of NBSSI to create 10,000 jobs annually-Executive Director

The CEO of COCOBOD, Joseph Boahene Aidoo, in addressing the gathering said: “The intention was to keep faith with the Ghanaian cocoa farmer and incentivise him to remain in cocoa farming. However, we have reached a stage where the capacity to sustain the price is fast becoming doubtful if the market price remains at the current low levels. We have done our bit, and it is left with you to also do your bit”.

The cocoa industry is estimated to be worth more than US$100billion annually, but it is fraught with unfairness and injustice in sharing the dividends – with the most disadvantaged being the smallholder farmers, Mr.Boahene noted.

Smallholder cocoa farmers’ income declined by 30 – 40 percent within a couple of months according to the Cocoa barometer in 2018.

Since September 2016, the world market price for cocoa has declined steeply – which has negatively impacted farmers and the economies of Ghana and Cote d’Ivoire.

“More than a third of cocoa’s value was wiped out between 2016 and February 2018, with a tonne of cocoa going from US$3,000 to US$1,900 in a matter of months; meanwhile the size of a bar of chocolate has not changed or gone down against the background of cheaper cocoa beans. Rather, cocoa butter equivalents – over 300,000 tonnes including palm oil – are being introduced in chocolate, which makes the moral argument about cocoa surplus and price fall untenable,” Mr. Boahene explained.

See Also:  World Trade Centre Accra leads successful trade mission to the Netherlands

The cocoa industry has contributed significantly to Ghana’s economic development over the years. Cocoa contributes about a quarter of Ghana’s Gross Domestic Product (GDP).

The industry has over the years created employment for millions of Ghanaians and serves as a major source of foreign exchange for the country.

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

The average free-on-board (fob) price of cocoa recorded in the 2017/2018 season was US$2,080 – a drastic fall from US$2,950 per tonne in the previous year.

This decline in price coincided with a significant rise in cocoa production – by over 120,000 tonnes above the projected 850,000 tonnes for 2016/17 season, which remained above 900,000 tonnes for the subsequent 2017/2018 season.

Leave a Reply

Please Login to comment
Notify of