Forward sale of 2020/21 cocoa beans from Ghana and Côte d'Ivoire has resumed.
It follows the cancellation of a suspension that was enforced by the two countries on June 11, 2019, a communiqué from the cocoa sector regulators in Ghana and Cote d’Ivoire has stated.
The Ghana Cocoa Board (COCOBOD) and the Le Councel du Cafe-Cacao of Cote d’Ivoire explained in the July 16 communiqué lifting the suspension that the decision followed the successful implementation of a floor price mechanism.
The lifting of the suspension will now allow buyers of the beans to resume negotiations on forward sales agreements for the purchase of cocoa from Ghana and Côte d'Ivoire.
The two countries account for about 65 per cent of the global supply of cocoa beans.
The communiqué was signed by the Chief Executive Officer of the COCOBOD, Mr Joseph Boahen Aidoo, and the Director General of Le Councel du Cafe-Cacao, Mr Kone Brahima Yves, and issued in Abidjan, the Ivorian capital.
The floor price mechanism, which was first introduced to cocoa sector stakeholders in Accra last month and fully instituted at a follow-up meeting in Abidjan on July 3, 2019, requires that buyers of cocoa beans from both countries add a living income differential of $400 to every tonne of cocoa.
Therefore, in addition to the prevailing price of the bean, the buyers are enjoined to add $400 to every tonne.
Prices to farmer
Mr Aidoo had earlier said that the joint agreement between the two countries required that their governments must always pay 70 per cent of the total amount earned from every tonne of cocoa to crop farmers.
The payment structure was supposed to be effective from the 2020/21 season, according to the CEO.
Ghana and Cote d’Ivoire are also required to pass a law to legislate the new payment scheme.
“We want this to come by legislation, so that tomorrow another CEO will not come and change it.
It must always be that the farmer is paid not less than 70 per cent of the floor price,” he stated at a media briefing.
In the 2018/19 crop season, Ghana produced about 950,000 tonnes of cocoa beans, compared to Cote d’Ivoire which produced in excess of 1.5 million tonnes.
In addition to being the biggest producers of the crop, both countries are noted for supplying premium beans, making their produce the most sought after by chocolate companies seeking distinct flavours for their products.