Ghana and Ivory Coast, the world’s largest producers of cocoa, will soon set up a Cocoa Stabilisation Fund Account under the respective cocoa initiatives of both countries.
Two accounts will be created – one in Ghana and the other in Ivory Coast, both of which are provided for in the Ghana-Cote d’Ivoire Co-operation Charter.
Chief Executive Officer of Ghana Cocoa Board (COCOBOD), Joseph Boahen Aidoo disclosed this at a media briefing in Accra yesterday.
Mr Aidoo explained that whenever cocoa price went beyond $3,000 Cost, Insurance and Freight (CIF) or $2,900 Gross Free on Board (FOB) on the world, the extra amount accrued from its sale will be put into the funds in both countries.
“Any extra value above $3,000 CIF or $2,900 gross FOB of the Achieved Weighted Average will be placed in these accounts,” he said.
This comes on the back of the recent success both countries chalked when they managed to get cocoa buyers and other stakeholders to agree on a $2,600 per tonne floor price last month, June 2019.
The COCOBOD CEO added that, “The only mandate for the disbursement from these accounts will be for the sole purpose of supporting the Achieved Weighted Average if it falls below $2,300 CIF or $2,200 gross FOB.”
Farmers to get 70% floor price plus bonus
Ghana and Ivory Coast also agreed that farmers in both countries would be guaranteed a minimum of 70% of the $2,600 FOB per tonne floor price.
And in instances when cocoa price hovers between $2,600 and $2,900 FOB in any given season, cocoa farmers are entitled to bonus payments by their respective national regulators (COCOBOD and Le Counseil du Café-Cacao)
“This minimum producer price would be legislated in both countries. When the achieved average gross FOB price at the end of the cocoa season is between the minimum price level of $2,600 and $2,900, the farmer would be entitled to bonus payments,” Mr Aidoo indicated.
Fund to support infrastructure
The COCOBOD boss noted that part of the money accrued in the fund will be used for corporate social responsibility (CSR) initiatives, to support the provision of infrastructure like roads in cocoa-growing communities.
Source: The Finder