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Business News of Monday, 22 July 2019


Ghana-Ivory Coast $400 living income differential in cocoa price not a surcharge - Cocobod clarifies

Joseph Boahen Aidoo, Chief Executive of the Ghana Cocoa Board (COCOBOD) Joseph Boahen Aidoo, Chief Executive of the Ghana Cocoa Board (COCOBOD)

The Chief Executive of Ghana Cocoa Board (Cocobod), Joseph Boahen Aidoo, has assured the $400 Living Income Differential introduced jointly with Ivory Coast on cocoa is not a surcharge.

“We will like to correct the misrepresentation of the lid to mean a surcharge, he said”

A press release issued in Accra and signed by the COCOBOD chief, clarified that the LID is part of the pricing component of the trading mechanism and not a surcharge as was reported by Bloomberg.

The clarification comes on the heels of a Bloomberg news report last Friday claiming Ghana Cocoa got no buyers on first market appearance since $400 premium.

The Cocobod Chief Executive, Joseph Boahen Aidoo, rejected claims in a Bloomberg report that Ghana had failed to get buyers for its cocoa.

“Management of Ghana Cocoa Board and its subsidiary cocoa marketing company (CMC) limited wish to clarify that, it has not failed to secure a buyer for its 2020/21 cocoa beans as has been widely publicized in the international media and replicated in the national media”, it said

The release explained further CMC had only embarked on a market testing routine following the introduction of a $400-premium on every tonne of cocoa, agreed jointly with Ivory Coast.

“In line with trading practice, CMC on 19th June 2019, decided to do a market sounding after the introduction of a Living Income Differential and weigh the market reaction and its dynamics”, Mr Boahen Aidoo noted.

Later speaking to the press release, the Head of Public Affairs at Cocobod, Fiifi Boafo, disclosed officials of Ghana and Ivory Coast have scheduled to meet over the development on September 11, 2019, in Abidjan, Ivory Coast to find a lasting solution.

“The issue has to do with the ability of the industry. Ghana and Ivory Coast have agreed to meet all the international partners to have a meeting on the 11th of September to discuss pricing and other trading mechanisms. We have no doubt that the new trading mechanism will be accepted by all,” he explained.

Earlier on Saturday, Mr. Boafo, took to Facebook to dismiss the report and accused Bloomberg of pursuing an agenda.

“CMC [Cocoa Marketing Company] was not even in the market to sell 20/21 crop beans yesterday but already Bloomberg is claiming Ghana beans did not find a buyer. I’m sure they had a script already prepared”, Mr. Boafo noted.

Bloomberg’s report claimed, “Ghana’s Cocoa Marketing Company, responsible for selling the nation’s cocoa, offered beans for 2020-21 to traders on Wednesday, said the people, who asked not to be identified because the information is private.”

No deals were concluded as the prices were too high, they said

“The West African producer, which typically starts making offers only around September or October, is testing the market now after it and top grower Ivory Coast introduced a $400 a metric ton premium over futures prices”, according to Bloomberg.

Ghana and Ivory Coast, the world’s largest producers of cocoa early this month announced every tonne of their cocoa sold on the market will have a $400 Living Income Differential (LID), 70% of which is planned to raise farmer earnings for their produce.

The two countries together produce over 60% of the world’s cocoa supply, but a history of low markets prices have subjected farmers to abject poverty with recent measures hoped to occasion some improvements.