Cocoa prices rose sharply on Wednesday after key producers Cote d’Ivoire and Ghana threatened to stop selling their production to buyers unwilling to meet a minimum price.
The threat pushed the September forward contract for the commodity, listed in New York, to $2,540 a tonne, up 1.4 per cent on the day.
The two African nations, which together account for 60 per cent of the world’s cocoa production, summoned buyers to Accra for a two-day meeting demanding a price of $2,600 per tonne.
At the end of the meeting, Joseph Boahen Aidoo, chief executive of the Ghana Cocoa Board, told a news conference that their demands had been accepted in principle by the participants, but that there would be a follow-up meeting to work out how to implement the agreement.
“Ivory Coast and Ghana have suspended the sale of the 2020/2021 crop until further notice for preparation of the implementation of the floor price,” he said.
Calling the move “historic”, he said that “this is the first time when the producers have called consumers and the first time whereby suppliers have called buyers to come and engage on price,” he said.
“Over the years it has been the buyers who have determined the price for the suppliers.”
Earlier, on the sidelines of the meeting, the chief of Cote d’Ivoire’s coffee and cocoa council, Yves Kone, said the industry needed a price that amounted to “a decent compensation” for workers’ efforts.
The world’s cocoa market is worth around $100 billion, of which only $6 billion go to producers.
But Casper Burgering, commodities analyst at ABN Amro, told AFP that the current price rise may turn out to be temporary, as supply was more than sufficient to meet world demand.
Another analyst, at Commodafrica in Paris, said however that drought in Ivory Coast could lead to a shortfall in the coming cocoa harvest, putting upward pressure on prices.