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We will no longer sell cocoa at origin differentials below zero - CIGCI

Cocoa From Ghanasa Ghana and Côte d’Ivoire account for almost 60% of world supplies for cocoa beans

Mon, 1 Aug 2022 Source: www.ghanaweb.com

Ghana and Côte d’Ivoire have agreed to no longer sell cocoa at origin differentials below zero, from as much as £125 pounds below the Intercontinental Exchange terminal market.

This is according to the joint Côte d’Ivoire-Ghana Cocoa Initiative (CIGCI).

Executive Secretary of the Initiative, Alex Assanvo, explained the decision was arrived after member countries expressed that their quality of cocoa has not diminished and no longer deem it fit to settle for discounts.

“The issue came up during a recent meeting with industry, where our member countries expressed the fact that the quality of their cocoa had not diminished and that they therefore shouldn’t have to settle for discounts on this matter,” he is quoted by Asaase Radio.

“We will therefore no longer accept cocoa sold below this level as we head into positive territory,” Alex Assanvo added.

The origin differential is an additional premium quality for cocoa growing countries which is often determined by the Intercontinental Exchange terminal market.

The differential, offers a key factor in determining cocoa prices along with the Living Income Differential (LID).

It is also associated with the Intercontinental Exchange Europe Price (London Futures market for cocoa), which guarantees a higher price for farmers in top cocoa growing and producing countries.

Currently, the new differential price levels are set to minimum of zero pounds per tonne for Côte d’Ivoire and £20 pounds per tonne for Ghana.

Meanwhile, at the end of May 2022, the joint Côte d’Ivoire-Ghana Cocoa Initiative began to publish the origin differentials in a bid to create more transparency in the cocoa value chain.

The move was necessitated following the effects of the LID being eroded as a result of discounts placed by chocolate makers and cocoa merchants on the origin differential.

In July this year, the origin differential was set at minus £125 pounds per tonne in Côte d’Ivoire and minus £50 pounds per tonne in Ghana.

Ghana and Côte d’Ivoire however account for almost 60 percent of world supplies for cocoa beans.

MA/FNOQ

Source: www.ghanaweb.com
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