…As Mechanism For Trading On International Market
By Adu Koranteng& Sebastian Cofie
Ghana and her trading cocoa counterpart Cote d’Ivoire have instituted a trading mechanism between the two West African countries at a stakeholders meeting in Accra. The primary purpose of the Accra stakeholders meeting was to agree on a floor price which will bring the two countries closer to achieving the important mandate of the two presidents respectively.
At the Accra stakeholders meeting, a technical committee made up of a working group from Ghana, Cote d’Ivoire and representatives from the Trade and Industry tasked to work out the processes for the smooth implementation of the agreed floor price mechanism and for that purpose a meeting scheduled for in Abidjan on the 3rd of July 2019. At the said meeting, Ghana and Cote d’Ivoire decided to implement the floor price concept by agreeing on a fixed living income differential (LID) of $400 per tonne for every cocoa sold by both countries from 2020/21 season.
With this announcement, every cocoa that will be sold from Ghana and Cote d’Ivoire from 2020/21 season will attract a fixed living income differential of $400. The LID would be applied to all category of beans.
The two countries further agreed that farmers in both countries would be guaranteed a minimum price of 70% of the floor price $2,600 price FOB ($2,700 CIF) per tonne. This minimum producer price would be legislated in both countries. When the achieved average Gross FOB price at the end of the cocoa season is between the minimum price level of $2,600 ($2,700 CIF)-$2,900 ($3,000 CIF), the farmer would be entitled to Bonus payments.
At a press briefing in Accra on Monday 8th July 2019, the Chief Executive of Cocoa Board
Mr Joseph Boahen Aidoo said a stabilization fund account shall be established under the Cocoa initiative of both countries and provided in the charter – two accounts to be set up for each country within the secretariat in Accra. According to the chief executive of cocoa board, any extra value above $3,000 CIF or $2,900 Gross FOB of the achieved weighted average will be placed in these accounts.
To him, the only mandate for the disbursement from these accounts will be for the SOLE PURPOSE of supporting the Achieved weighted average if it falls below $2,300 CIF or $2,200 Gross FOB. And ensured the media they are committed to the call by the President Nana Addo Dankwa Akufo-Addo to ensure a better living condition for our farmers and shall therefore not rest on our oars after this feat but further pursue other programmes and initiatives for the betterment of farmers and the sustainability of the industry.