Ivory Coast Says Minimum Cocoa Price Needed to Draw New Growers
Ivory Coast’s move to implement a fixed minimum cocoa price will entice more younger farmers to plant the beans.
(Bloomberg) -- Ivory Coast’s move to implement a fixed minimum cocoa price will entice more younger farmers to plant the beans after growers have turned to more lucrative crops, according to the country’s trade minister.
Ivory Coast and neighboring Ghana, which account for more than two-thirds of global cocoa production, earlier this month agreed with buyers and processors to a floor price of $2,600 per ton. Cocoa hasn’t traded at that level for more than a year. The move forms part of increased cooperation efforts by the two countries as they seek to improve economic benefits from the cocoa industry.
Farmers’ compensation in Ivory Coast is more than 30% lower than three years ago and Ghana has implemented costly subsidies to maintain producer pay in the face of falling prices. The average Ivorian cocoa producer is in their 50s, as many younger farmers prefer to grow rubber, cashews, palm oil and cotton, Trade Minister Souleymane Diarrassouba said in an interview in the Mozambican capital, Maputo.
“The next generation needs to be attracted to the industry,” said Diarrassouba. “The more the price of cocoa rises, the more the farmworkers will earn. There’s no chocolate without farmers.”
To be sure, analysts have cautioned that the introduction of a floor price may result in oversupply of cocoa.
Ivory Coast and Ghana will continue meetings next month to nail down the practicalities of the minimum price which is earmarked for the season that begins in 2020.
--With assistance from Prinesha Naidoo, Katarina Hoije and Irene García Pérez.
To contact the reporters on this story: Borges Nhamire in Maputo at bnhamire@bloomberg.net;Leanne de Bassompierre in Abidjan at ldebassompie@bloomberg.net
To contact the editors responsible for this story: Andre Janse van Vuuren at ajansevanvuu@bloomberg.net, Liezel Hill
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