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Top Cocoa Growers Halt Sales Amid Drive to Agree Minimum Price

Top Cocoa Growers Halt Sales Amid Drive to Agree Minimum Price

(Bloomberg) -- The world’s two biggest cocoa producers halted sales for the harvest that will begin in October 2020, pending an agreement with buyers on a minimum price.

Ivory Coast and Ghana want to set the floor price at $2,600 per ton, Joe Forson, managing director of Ghana Cocoa Board’s marketing unit, told buyers Tuesday in the Ghanaian capital, Accra. Should the market price fall below this level, the two regulators will implement a so-called “living-income differential” to make up the difference, said Forson.

Top Cocoa Growers Halt Sales Amid Drive to Agree Minimum Price

The regulators of both countries are meeting buyers about the proposal, which they said is necessary to address income disparity in the cocoa value chain. The two countries last year outlined plans to coordinate cocoa production and marketing as part of efforts to exert more control in the market after sharp price swings in recent years.

“I would expect that negotiations around the minimum price will continue for the next few weeks,” said Cole Martin, a senior analyst at Fitch Solutions Ltd. “It would be set according to where cocoa prices are at the time.”

Accounting for about three-fifths of global cocoa output, Ivory Coast and Ghana typically sell about 80% of the bigger of the two annual harvests before it starts.

--With assistance from Liezel Hill.

To contact the reporters on this story: Ekow Dontoh in Accra at edontoh@bloomberg.net;Irene García Pérez in London at igarciaperez@bloomberg.net

To contact the editors responsible for this story: Andre Janse van Vuuren at ajansevanvuu@bloomberg.net, Rene Vollgraaff

©2019 Bloomberg L.P.