Ivory Coast and Ghana push cocoa industry to boost premium payments

The two largest Cocoa producers in the world, Ivory Coast and Ghana have demanded that   cocoa and chocolate companies pay more in premiums to support farmers’ income, the head of Ivory Coast’s industry regulator has revealed.

Nonetheless , the head of Ivory Coast’s Coffee and Cocoa Council (CCC),Yves Kone, admitted  that the two countries have limited leverage  to force the CCC companies due to the  fall  in global demand of the produce as a result of the  outbreak of the COVID-19 pandemic.

The two countries, Ivory Coast and Ghana, account for about two-thirds of the world’s cocoa. Both countries agreed on a $400 per tonne premium this season aimed at increasing the income of cocoa farmers who normally  live in poverty.
Sharp decline in the Price of the produce at the  Global market  forced  Ivory Coast to slash a separate quality premium that exporters pay, known as the country differential. 

It would be recalled that, in February this year , the Cocoa and Chocolate  Companies  turned the premium into a more than $350-per-tonne discount, mainly aimed at withdrawing  the Living Income Differential, this forced Ghana to lower  its differential.

According to YvesKone, because the CCC cannot attack the LID, they decided  to attack the country differential,  which amounts to exactly the same thing. ” We asked them to stand down,” he quickly  added. 

Kone Continued that  he expected talks to resume in the coming weeks, adding that a country differential of around $140 dollars would allow Ivorian authorities to pay farmers a good price during the upcoming 2021/22 season.
He further  indicated that Ivory Coast was aiming to hold down annual cocoa production to 2 million tonnes by gradually removing cocoa farms from protected forests. During the last cocia season, the country produced 2.15 million tonnes during the 2019/2020 season.

However, the vice President of the World Cocoa Foundation(WCF), Alexander Ferguson, hinted that companies wanted to ensure that farmers receive more income for their hard work in the industry, adding “this is why companies are providing premium payments for certified and/or verified sustainable cocoa, and supporting the living income differential. ” 

Yves Kone stated that the CCC also aims to become a direct exporter of beans and semi-finished cocoa products in the next two years in order to reduce the influence of multinational companies in the sector.

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