Ghana And Ivory Coast Cocoa Agreement

The partnership between the CCC and COCOBOD also relies on coordinating production times, as it includes an agreement on market volumes and sets a standard price for producers to avoid smuggling along the border. ACCRA/ABIDJAN (Reuters) – Buyers in Ghana and Côte d`Ivoire agreed on Wednesday on a minimum price of 2,600 $US a tonne, as proposed by both governments to correct a supposed imbalance between farmers` incomes and the money of major commodity traders. Together, the two West African countries account for about 60% of the world`s cocoa and have already coordinated a joint Single Income Differential (LID) price initiative to add $400 per tonne to help farmers fight poverty when the market price falls below $2,600 per tonne. Like OPEC, whose control of crude oil production has largely fuelled world oil prices since 1960, the decision of the world`s two largest cocoa producers to join forces is expected to increase the cost of candy bars, ice cream and cakes. The chocolate block with two nations decided to charge an additional $400 a tonne of cocoa, which currently costs about $2,500 a tonne. To protect farmers, the world`s two largest cocoa producers have agreed to coordinate cocoa bean prices in 2020-2021. In a letter to Hershey, seen by Reuters, Ivorian and Ghanaian cocoa regulators accuse Hershey of obtaining unusually large quantities of physical cocoa from the ICE Futures Exchange in order to avoid the premium known as residential income difference (LID). The Ivory Coast-Ghana Cocoa Initiative (ICCIG) will promote its cocoa industry internationally and defend its collective position in the global market, the Ivorian government said in a statement. Nigeria and Cameroon are the youngest African nations looking for ways to negotiate a better premium with cocoa buyers, a step inspired by the decision of Côte d`Ivoire and Ghana to raise the price of their crops.

Côte d`Ivoire and Ghana, which account for nearly two-thirds of world production, have imposed a fixed „life income gap“ of $400 per tonne for all cocoa contracts sold by the two countries for the 2020/21 season. A major study on the subject in 2016, published in Fortune in the United States, concluded that about 2.1 million children in different West African countries „are still doing the dangerous and physically painful work of the cocoa harvest.“ The report doubted that the situation could be improved. On Wednesday, Ghana and Côte d`Ivoire suspended the pre-sale of cocoa beans for the 2020/21 season until an agreement is reached on the price of the soil. The two West African neighbours joined forces in June to impose a base price for cocoa of $2,600 per tonne and a living income gap of $400 per tonne. With about two million children involved in cocoa farming in West Africa, mainly in Ghana and Côte d`Ivoire, child slavery and human trafficking have been a major concern in 2018. [9] [10] However, international attempts to improve conditions for children have failed due to persistent poverty, lack of schools, increased global demand for cocoa, increased cocoa farming and continued exploitation of child labour. [9] [11] Through a joint initiative, Ghana and Côte d`Ivoire were able to convince chocolate distributors and producers to raise the price of cocoa.