Ghana farmers sweet on cocoa minimum price drive

Last week, Ivory Coast and Ghana decided to rise the global price of cocoa. (AFP)
Updated 01 July 2019

Ghana farmers sweet on cocoa minimum price drive

  • Ivory Coast and Ghana had earlier threatened to stop selling their products to buyers unwilling to meet a minimum price of $2,600 per ton
  • The two African nations together account for 60 percent of the world’s cocoa production

ACCRA: Kwame Boadu was forced to abandon his cocoa plantation to work in Ghana’s capital Accra, but when the government announced plans for a price floor he began dreaming of a return to his fields.

A higher guaranteed price for the crop means a cocoa farmer “can afford fertilizer, he can afford weedkiller, he can employ more laborers, so he can increase his production,” he said.

And moreover, it would guarantee that farmers get more money when they increase output, the 34-year-old added.

Earlier this month, key producers Ivory Coast and Ghana threatened to stop selling their products to buyers unwilling to meet a minimum price of $2,600 per ton.

The two African nations — which together account for 60 percent of the world’s cocoa production — want to end a situation where cocoa producers make only $6 billion in a global chocolate market worth around $100 billion.

The move sent world cocoa prices briefly above $2,500 per ton, but they have since fallen back below that level.

IN NUMBER

The likely price of a ton of cocoa following Ghana and Ivory Coast’s decision to introduce a price floor.

After spending much of 2015 above $3,000 per ton, world cocoa prices slumped, fluctuating around $2,000 in 2017. The price drop squeezed farmers, who welcome government intervention.

“We don’t have anything to sell apart from cocoa,” said Alhaji Alhassan Bukari, who heads up Ghana’s farmers’ union.

“So if the government has thought about the farmers, they come together to fight for the farmers, we support them,” he said.

Cocoa is a key sector of the national economy, according to the Ghana Cocoa Board, both in terms of providing employment to around 800,000 families and generating revenue for the government’s coffers.

Ghana’s Vice President Mahamudu Bawumia said earlier this month at a meeting with farmers and buyers that Ghana and Ivory Coast made their proposal to ensure farmers get “a fair share of the wealth that the industry generates.”

Establishing a price floor would also help revive rural communities.

“A satisfactory price of cocoa beans will go a long way to complement the government's investments in rural infrastructure and improve the wellbeing of the communities,” said Bawumia.

But farmers are not the only ones concerned by the discussion over cocoa prices.

While chocolate has long been a marginal product in Ghana, despite the country being a major producer of its primary ingredient, in recent years a new batch of chocolate makers has set up shop.

Selassie Atadika, the chocolatier at Midunu, a maker of handcrafted chocolates, says she has noticed more local chocolate on the shelves in Ghana’s shops.

“I think in general there is more awareness, people are using it at more events and things like that so there is probably an increase in people’s interest in buying chocolate.”

These local producers have an interest in cocoa prices, and fear a jump in prices could hurt their businesses.

Atadika said she hopes a price floor would help cocoa farmers.

But for those trying to develop chocolate as a product “issues remain, even if the price of cocoa beans does not change, the price of sugar, milk powder and electricity will still be a major influence in their capability to make the chocolate,” she said.

Local producers buy beans from the second, smaller harvest. Moreover, they enjoy a subsidy on the purchase of beans from this harvest, according to the Ghana Cocoa Board.

“What would make an impact on domestic chocolate makers is if there was a loosening of regulations regarding who can sell and buy main crop beans, which would open opportunities for new domestic sourcing routes for cocoa,” said Kristy Leissle, a cocoa industry expert and lecturer at the University of Washington Bothell.

A development which would benefit all is if more cocoa was processed in Ghana, capturing more of the value added in the industry.

“We need to add value in Ghana, so we can send the world’s best products from here,” said chocolatier Atadika.


Egypt expects several share offerings by end of year

Updated 15 September 2019

Egypt expects several share offerings by end of year

  • One small company worth about 50 million Egyptian pounds was also expected to offer shares on the Nile Stock Exchange

CAIRO: Egypt expects two state companies and one private pharmaceuticals firm worth more than $61.3 million, or one billion Egyptian pounds, to make share offerings by the end of the year, an official at the Financial Regulatory Authority said on Sunday.
One small company worth about 50 million Egyptian pounds was also expected to offer shares on the Nile Stock Exchange, which specializes in small and medium sized enterprises, said Sayed Abdel Fadeel, head of the authority’s corporate finance department. He did not name the companies.
Egypt promised to sell minority stakes in several state companies in late 2018 but postponed the offerings following emerging market turbulence.