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Business News of Tuesday, 26 February 2008

Source: GNA

Cocoa price goes up

Accra, Feb. 26, GNA - Government on Tuesday increased the producer of price of cocoa for the 2007/08-Crop Year from 950 GH cedis to 1,200 GH cedis per metric ton representing 26.4 percent rise.

In addition, it would pay bonuses for the 2007/2008 main crop season, Professor George Gyan-Baffour, Deputy Minister of Finance and Economic Planning told journalists in Accra.

The new adjustment meant therefore that, a bag of 64 kilogrammes of cocoa is now 75 GH cedis from the current 59.375 GH cedis. This is the second time in seven years the producer price has been adjusted upward. Prof. Gyan-Baffour said; "The last time such a revision was made was during 2001/2002 main crop season in February 2002 when government had to review upwards the producer of cocoa to reflect the prevailing development in the global cocoa market."

He noted that with the projected tonnage of 111,050 yet to be purchased, government would now incur an extra cost of 27.76 million GH cedis for the rest of the main season.

He said in spite of the impressive performance seen so far in this season, the upsurge of smuggling activities across the Western and Eastern borders sent worrying signals.

Prof. Gyan-Baffour said the producer price offered by buyers in Cote d'Ivoire between the second week of this February this year, showed an average equivalent of 1,190.26 GH cedis against the Ghana current producer price of 950 GH cedis.

The relative price differential led to the upsurge of the smuggling. On the payment of bonuses, Prof. Gyan-Baffour said: " who sell their cocoa to registered LBCs in Ghana will be paid additional monies at the end of the 2007/08 season as bonuses for their sales." He said the second tranche of bonuses for the 2006/07 seasons would be paid in June/July this year as promised by government. The first tranche of 16 million GH cedis has been paid already by COCOBOD.

Prof. Gyan-Baffour said Government would continue to ensure that stakeholders in the industry were paid economic rates and fees so that their businesses remained profitable.

"To this end, increases in buyer's margin for LBCs, hauliers rates for evacuation, among other rates and other charges would be reviewed upwards in due course," he said.

Mr Isaac Osei, Chief Executive of the Ghana Cocoa Board said with the new price, purchases declared by LBCs as at week number 18 ending February 21, 2008 would attract the old producer price of 950 GH cedis per ton whilst those made after February 21, attracted the new producer price.

He described the new price very competitive when compared to prices being floated in the neighbouring countries of Ghana and would therefore serve to stem the tide of cross border trade in cocoa from Ghana. "It will also put more money into the pockets of farmers and therefore enhance their welfare," Mr Osei said. 26 Feb. 08