ZCZC
BCN-15
MARKETS-COMMODITIES-COCOA
Cocoa prices soar as ICoast, Ghana threaten supply cut
LONDON, June 13, 2019 (BSS/AFP) – Cocoa prices rose sharply on Wednesday
after key producers Ivory Coast and Ghana threatened to stop selling their
production to buyers unwilling to meet a minimum price.
The threat pushed the September forward contract for the commodity, listed
in New York, to $2,540 a tonne, up 1.4 percent on the day.
The two African nations, which together account for 60 percent of the
world’s cocoa production, summoned buyers to Accra for a two-day meeting
demanding a price of $2,600 per tonne.
At the end of the meeting, Joseph Boahen Aidoo, chief executive of the
Ghana Cocoa Board, told a news conference that their demands had been
accepted in principle by the participants, but that there would be a follow-
up meeting to work out how to implement the agreement.
“Ivory Coast and Ghana have suspended the sale of the 2020/2021 crop until
further notice for preparation of the implementation of the floor price,” he
said.
Calling the move “historic”, he said that “this is the first time when the
producers have called consumers and the first time whereby suppliers have
called buyers to come and engage on price,” he said.
“Over the years it has been the buyers who have determined the price for
the suppliers.”
Earlier, on the sidelines of the meeting, the chief of Ivory Coast’s
coffee and cocoa council, Yves Kone, said the industry needed a price that
amounted to “a decent compensation” for workers’ efforts.
The world’s chocolate market is worth around $100 billion, of which only
$6 billion go to cocoa producers.
But Casper Burgering, commodities analyst at ABN Amro, told AFP that the
current price rise may turn out to be temporary, as supply was more than
sufficient to meet world demand.
Another analyst, at Commodafrica in Paris, said however that drought in
Ivory Coast could lead to a shortfall in the coming cocoa harvest, putting
upward pressure on prices.
BSS/AFP/HR/1115