Chocolate Industry

Ivory Coast and Ghana to release cocoa premium to highlight lower prices

By Angel Aboa

May 17 (Reuters) – From the end of May, Ivory Coast and Ghana will publish monthly the premium paid by chocolate makers and cocoa traders for quality cocoa to achieve a minimum price floor for the benefit of farmers , a joint statement said Tuesday.

The two West African countries, which together produce more than 60% of the world’s cocoa, struggle to secure a living wage in the sector, where low prices encourage deforestation and child labor.

Country cocoa boards said buyers have been negotiating the so-called origin differential since the introduction of another premium to support farmers in 2019. Combined with market fluctuations, this has eroded the increase in income expected for producers.

By releasing the figures on a monthly basis, the Ivorian Coffee and Cocoa Council (CCC) and Ghanaian regulator COCOBOD said they hoped to bring greater transparency and achieve the minimum price of $2,600 per tonne that has been forecast since 2019. .

“It has become necessary to re-engage with key stakeholders and partners…to immediately provide a minimum floor price of $2,600 per ton as originally planned,” they said in a statement read at a conference. release in Abidjan by the executive secretary of the initiative. Alex Assanvo.

In June 2019, Côte d’Ivoire and Ghana set the floor price of $2,600 and the so-called Living Income Differential (LID) of $400 per ton to tackle poverty among farmers, many of whom earn well. less than $1 a day.

Since then, according to two industry sources, the origin differential has fallen to around minus $155 per ton in Côte d’Ivoire and minus $125 in Ghana, from around $300 and $200 respectively.

“Today, with the differentials being negative, the impact of LID on the guaranteed producer price has virtually no effect on farmers’ income which should have experienced a significant increase,” the cocoa boards said.

“The origin differentials will be published (…) as a step towards greater transparency of a key element of the price of cocoa,” they said. ($1 = 0.8025 pounds) (Editing by Alessandra Prentice; editing by David Evans)