Commodities

Cote d’Ivoire and Ghana raise cocoa prices to offset negative premiums

By Anthony Myers contact

- Last updated on GMT

Pic: CN
Pic: CN

Related tags: Cocoa, Cocoa bean, Chocolate, Côte d'ivoire, Ghana

The two world's biggest cocoa producers, Cote d’Ivoire and Ghana, have announced they are raising the price of their beans to help farmers earn a decent living income.

Cote d’Ivoire’s Coffee and Cocoa Council (CCC) has set its premium or origin differential at zero for August compared with -£125 per tonne in July, it said in a statement.

Ghana's regulator Cocobod will raise its origin differential to 20 pounds/tonne in August from -£50/tonne in July, it said. Ghana's differential is higher because it produces better quality beans than its neighbour, who produces more.

The premium is paid by chocolate companies and traders for beans and is meant to generate more income for poor farmers, but it has often dropped below zero due to pressure on cocoa prices on the commodity market.

Negative origin differentials in recent years have effectively cancelled out part of another premium, the $400 Living Income Differential (LID), which was introduced in 2019 to tackle farmer poverty, and broadly welcomed by chocolate makers and cocoa suppliers.

Earlier this year, the two West African countries agreed to jointly publish their origin differentials each month as part of the joint Cote d'Ivoire-Ghana Cocoa Initiative (CIGCI).

"Our ambition is to no longer sell cocoa with a negative premium. It is to ensure that our producers receive a decent and remunerative income for their cocoa and to achieve this, the origin differential must once again be positive and the LID also applied​," Alex Assanvo, executive secretary of the CIGCI, told Reuters. "We will therefore no longer accept cocoa sold below this level as we move into positive territory​."

According to Reuters, Ghana hopes to sell the rest of its cocoa export contracts for the 2022-23 season with a positive differential, while Cote d’Ivoire has already sold all of its contracts for the upcoming 2022-23 main crop but hopes to apply a positive differential for the 2022-23 mid-crop and the 2023-24 season.

Related topics: Commodities

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