The Cocoa Association of Nigeria (CAN) has said that the recent cocoa floor price agreement reached by the two leading growers of the crop lack the support of other top producers of the commodity.
In a statement made available to BusinessDay, CAN questioned the rationale behind the world’s two largest producers in determining the commodity floor price at the international market.
“We are concerned that the decision of the two countries, without prior consultation with other producing countries could portend unintended grave distortions in the global cocoa economy,” Sayina Riman, president, CAN said in the statement.
“The decision was taken unilaterally by the governments of the two countries without even consulting with the producers and other private sector stakeholders in both countries, let alone other producing countries’ governments and private sector,” said Rima World Cocoa Producers Organisation.
While acknowledging that cocoa farmers have remained poorly remunerated in the global cocoa market, he said that $2,600 per ton agreed price is still a far cry from what should have been the bench mark based on the production cost.
He drew attention to a previous initiative in the 1960s championed by Nigeria and Ghana, then the two largest producers that did not have the buy in of other critical stakeholders.
He noted that in contrast to the 1962-63 move, which produced the Cocoa Producers Alliance, the 1st International Cocoa Agreement and establishment of International Cocoa Organization, this latest move did not have the buy-in of the other critical stakeholders.
He asked if both countries have the capacity in terms of structures and funding to withhold stocks and not create greater problems for growers.
“Will they not create more problems for the producers that will make farmers lose more money than is intended? Will they be able to cope with the distortions that this move may cause for economies of other producing countries?” Riman asked.
Ghana and Cote D’Ivoire jointly account for about 67 percent of the global bean output, while other growers account for the remaining.
Josephine Okojie
