Next Africa: Cocoa’s OPEC Is in Fight With Few Winners

SourceBloomberg
SectorEconomy
CountryGulf

Ivory Coast and Ghana, who together produce about two-thirds of the world’s cocoa, are insisting that traders pay a higher price for their beans.That’s due to a hefty $400 Living Income Differential over futures prices to boost the amount of money farmers take home, as well as additional quality surcharges.A world hit by the coronavirus, and the consequent slump in demand, has traders fighting back against the country-quality premiums, and some have compared the two nations to the OPEC oil cartel as they team up on prices.A cocoa bag from Ghana.Photographer: JANE HAHNAlready some foreign shippers in Ivory Coast have stopped buying cocoa for future delivery, asking for a lower country differential. The governments are considering countering that by suspending sustainability programs, likely making it more difficult to sell the beans to buyers who demand an ethically sourced product.While that’s a tactic that has worked before, this year many traders and their customers are under unprecedented strain due ...read more...