Ivory Coast and Ghana to raise cocoa premium next month

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Ivory Coast and Ghana to raise cocoa premium next month

A man prepares cocoa beans for sale in Daloa, which produces a quarter of Ivory Coast’s national cocoa output, File. REUTERS/ Thierry Gouegnon/File Photo

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ABIDJAN, July 29 (Reuters) – Ivory Coast and Ghana, the world’s biggest cocoa producers, said on Friday they would next month raise the premium that chocolate makers and traders pay for their beans as they step up efforts to tackle farmer poverty.

Ivory Coast’s Coffee and Cocoa Council (CCC) has set its premium – or origin differential – at zero for August compared with -125 pounds per tonne in July, it said in a statement.

Ghana’s regulator Cocobod will raise its origin differential to 20 pounds/tonne in August from -50 pounds/tonne in July, it said.

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Ghana’s origin differential is higher because its beans are generally better quality.

The two West African countries, which together produce more than 60% of the world’s cocoa, decided in May to jointly publish their origin differentials each month as part of the joint Cote d’Ivoire-Ghana Cocoa Initiative (CIGCI).

The premium is meant to increase the prices paid to impoverished farmers, but it has often dropped below zero due to pressure from multinational cocoa traders and chocolate makers.

Negative origin differentials in recent years have effectively cancelled out part of another premium, the $400 Living Income Differential (LID), which was introduced in 2019 to tackle farmer poverty.

“Our ambition is to no longer sell cocoa with a negative premium. It is to ensure that our producers receive a decent and remunerative income for their cocoa and to achieve this, the origin differential must once again be positive and the LID also applied,” said Alex Assanvo, executive secretary of the CIGCI.

“We will therefore no longer accept cocoa sold below this level as we move into positive territory,” Assanvo said.

Ghana hopes to sell the rest of its cocoa export contracts for the 2022/23 season with a positive differential, said sources close to Cocobod.

Ivory Coast has already sold all of its contracts for the upcoming 2022/23 main crop but hopes to apply a positive differential for the 2022/23 mid-crop and the 2023/24 season.

“We have decided with COCOBOD in Ghana to set a positive differential for August and for the other months to come. The origin differential rewards the good quality of the cocoa we produce, so it is a legitimate request,” said a source at the CCC.

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Reporting by Ange AboaEditing by Nellie Peyton and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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