Ghana and Ivory Coast’s combined cocoa price action offers key milestone
The past week has seen the governments of Ivory Coast and Ghana team up to declare a minimum price for selling cocoa supplies, which has already made a number of industry observers sit up and pay close attention.
Deciding upon at a rate of US$2,600 per metric tonne may not in itself lift farming communities out of poverty as a single action, but what it does achieve is cohesive action to signal that such crops should be more highly valued by the wider market.
Historically, as a crop, it has enjoyed success, with cocoa prices being regarded as relatively high in the 1970’s and early 1980’s, but progressive declines in value have continued to impact on those who are at the forefront of the industry.
While the actions of major corporations including Mars, Ferrero, Mondelez International and Barry Callebaut in terms of respective sustainability programmes to assist farming communities are doubtless making inroads into their goals, the basic requirement of a recovery in prices paid to farms remains at the heart of the issue for many sector observers.
As Confectionery Production reported from the World Cocoa Conference in Berlin last year, Ivory Coast and Ghana, which make up around two thirds of the cocoa market, signalled their intent to work more closely together.
This latest deal is the culmination of those initial discussions, but the real challenge will now come in ensuring that those who most need the finances, the farmers, are the direct recipients of any price gains.
Significantly, there have been global headlines and focus pieces in recent weeks regarding this key matter, and also that of other related major issues surrounding the use of child labour with the cocoa sector. According to latest figures, across Ghana and Ivory Coast still reportedly employs around two million children (just a fraction of the 72 million children reportedly working across the African continent, according to the International Labor Organization).
Furthermore, of considerable concern is the observation from industry analysts that there have, as yet, been no notable prosecutions or penalties passed down to those that have failed to respect codes of practice surrounding employment of children.
Despite such ongoing concerns, the fact that Ghana and Ivory Coast are now co-ordinating their export policies can only serve to benefit those countries in their bid to secure a fair price for their key commodity. While the road to making much-needed major improvements is a long one, it seems the journey is now well under way.