Finance Ministry set to introduce FOB-based cocoa price to enhance efficiency

The Ministry of Finance has announced its plans to reform the producer price determination mechanism for the cocoa industry.

This initiative, according the ministry aims to improve efficiency and financial viability in the country's cocoa sector.

In order to achieve this, the ministry is considering implementing a new pricing system based on Free-on-Board (FOB) prices.

The use of FOB prices will align cocoa prices with global market fluctuations, thereby reducing financial shocks to COCOBOD.

Director of the Economic Strategy and Research Division at the Ministry of Finance, Dr. Iddrisu explained during the first Quarterly Economic Roundtable that this approach is essential.

“That’s the way to go, so when there are volatilities in the prices they are reflected immediately into the pricing regime – reducing any shock to the books of COCOBOD”

“The consensus is that there’s a Ministry of Roads and the ministry is a better place to do some roads than COCOBOD itself,” he explained.

Dr. Iddrisu also mentioned that another important reform, which is the phasing out of road construction activities by COCOBOD, is yielding positive results.

He noted, "It is widely agreed that the Ministry of Roads is better equipped to handle road construction than COCOBOD."

This strategic shift has already led to significant cost savings according to Dr. Iddrisu.

"The significant expenditures for COCOBOD Roads that were impacting COCOBOD's financial statements have been rationalized and reduced considerably," he said.

EAN/MA

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