Business News of Friday, 17 January 2020
Ghana’s Cocoa Marketing Company had sold 280,000 tonnes of cocoa for the 2020/21 season by January 7, with prices that include a new US$400 per tonne living income differential (LID), sources at CMC and the cocoa regulator, COCOBOD have revealed.
The prices include a new premium to support farmers and to tackle pervasive farmer poverty.
COCOBOD’s CEO Joseph Boahen Aidoo, in November last year, confirmed that Ghana was expecting to sell forward around 650,000 tonnes of next season’s crop.
Ivory Coast and Ghana announced in July last year, that all cocoa purchases for the 2020/21 season must include a LID of $400 a tonne in a bid to tackle pervasive farmer poverty.
The move was a major overhaul of how global cocoa is priced and buyers initially responded cautiously with only a few deals concluded in the period immediately following the announcement. However, forward market sales have picked sharply in recent weeks encouraging market participants to assume that global demand will meet production under the new, higher cocoa prices.
Indeed COCOBOD confidently maintains that the LID has come to stay, urging all buyers, processing companies, manufacturers, and brand companies to embrace it.
With the international cocoa markets exhibiting their assent to the new, higher price regime COCOBOD can now turn its primary attention to increasing farmer ptroductivity and consequently national production levels. Ghana’s state owned cocoa industry regulator and facilitator has recently secured a US$600 million medium term loan from the African Development Bank with which it intends to engage in industry restructuring that targets an increase in annual production to 1.5 million tons annually by 2027, nearly double the 850,00 Ghana has averaged over the past few years.