A Former Chief Executive of the Ghana Cocoa Board and Economist Kwame Pianim has warned that the ban on the export of cocoa by the internationally recognized winner of Cote d’Ivoire’s presidential election could have a negative impact on Ghana.
The price of cocoa hit a new one-year high on Monday January 24, 2011, after Mr. Alassane Ouatarra announced a one month suspension on exports of cocoa. Cote d’Ivoire is the world’s largest supplier of cocoa, contributing around 40% of global output.
Cocoa is the largest single source of foreign exchange to Ghana and the country accounts for about 11 percent of the world’s total.Analysts say the cocoa powerhouse’s misfortune may become Ghana’s fortune as Ghana can be at an advantage in exporting the commodity.
However in an interview with Citi Business, the onetime Chief Executive of the Ghana Cocoa Board said the move by Mr. Ouatarra breaches the sanctity of international contracts which will in the long term affect not only Cote d’Ivoire but Ghana as well.
“The impact on Ghana will be negative because the measure undermines the sanctity of contracts and the fact that when people pay for cocoa, they expect it to be shipped in January, February and March which has always been the case. So now that Cote d’Ivoire has taken this decision people will expect that Ghana may also do the same so it will undermine the regularity and the stability of international commodity marketing” he said.
The cost of a tonne of cocoa jumped by 6.2% to $3,393 on Monday, the highest level since January 2010.
Analysts have predicted that the price could continue to escalate unless the deadlock in Cote d’Ivoire is resolved.Already workers in the UK are feeling the impact. Burton’s Foods blamed higher cocoa and wheat prices for the closure of one of its factories.
“I do not expect it to have significant effect on cocoa prices because we are at the tail end of the marketing period and also we know the tonnage. So it is where the cocoa is that is an issue” Mr. Kwame Pianim said.