Cocoa
Agreement by Côte d'Ivoire and Ghana to introduce new minimum floor price for cocoa fails
A meeting between two of the world’s biggest cocoa producers, Côte d'Ivoire and Ghana, has failed in its bid to set a new minimum floor price for the export market.
The West African neighbors had agreed last month to fix a minimum price of $2,600 per ton for the 2020/21 season, but failed to make an agreement on Wednesday in what was described as a ‘Technical Meeting’ with the chocolate industry over how to introduce the price.
Cocoa regulators from the two countries met in Abidjan to discuss the details of the plan with industry representatives including Hershey, Mars Inc., Blommer Chocolate, Cemoi, SucDen, Mondelēz International, Touton, Barry Callebaut, Cargill Olam International and Ecom Trading.
In a statement released to the media, Côte d'Ivoire and Ghana said instead they would institute a $400 per ton so-called ‘Living Income Differential’ written into export contracts that would be applied if market prices fall below $2,600.
As reported by ConfectioneryNews, the two governments proposed a common floor price to address farmer incomes, which they complain are extremely low relative to the money made by big cocoa traders.
“The mechanism that Ghana and Ivory Coast proposed to us still lacks clarity and precision for its adequate application, so there will need to be more meetings,” a company official told Reuters, and asked not to be named.
“They aren’t obliged to accept, because it’s a free market. If they don’t want to pay the price that we are proposing, they can go elsewhere,” Joseph Boahen Aidoo, CEO of Ghana’s cocoa regulator Cocobod, told a news conference soon after the meeting broke up.
Third-party certification schemes, corporate sustainability programs, and government-guaranteed minimum prices in both countries have aimed to raise living standards for farmers, but a Fairtrade International survey last year found that just 12% of Ivorian cocoa-farming households earned $2.50 per person per day, a level it calculated to be the living income benchmark.
