Ivory Coast and Ghana, which together supply about 60 percent of the world’s cocoa, will start coordinating their sales of the beans as part of efforts to exert more influence on the market reports Bloomberg.
The neighbors want to harmonize their marketing systems and officials from each country will visit the other to exchange information, Joseph Boahen Aidoo, chief executive officer of Ghana’s cocoa regulator, told reporters in Abidjan, Ivory Coast’s commercial capital, Wednesday.
“So once we are able to harmonize, then the two countries can decide when to go to the market,” Aidoo said. “Once that decision is taken and what amount or volumes of cocoa that can go to the market, then we can regulate.”
The countries will also work on setting a “decent” floor price for their farmers and will announce the rate at the same time before each harvest from next season, they said in a statement.
Both countries have been discussing plans for cooperation to strengthen the West African cocoa sector and exert more influence over global prices, which plunged in the previous two years after harvests were bigger-than-expected, hurting both economies. Ivory Coast, the biggest grower, was forced to cut the price for its estimated 800,000 farmers by more than a third last year.
The announcement with details of the cooperation plans is unlikely to have much impact on cocoa prices for now, said Carlos Mera, an analyst at Rabobank International.
“There were talks already and the countries were already announcing price changes at more or less the same time,” he said.
The two nations agreed to expand and speed up efforts to protect forests, Mariam Coulibaly Dagnogo, a spokeswoman for Ivorian industry regulator Le Conseil du Cafe-Cacao, told reporters as she read out the statement issued after two days of meetings in Abidjan. That could have implications for cocoa output as growers in Ivory Coast have significantly expanded illegal plantations in protected forest areas in recent years.
Ghana will also start pulling up as much as 400,000 hectares of cocoa farms infected by the swollen shoot disease, Aidoo said.
The two countries will make sure that programs initiated by private companies to boost production are in line with their joint strategies, Dagnogo said. Earlier this year, Ivory Coast suspended existing programs aimed at improving farmers’ productivity.
Cocoa for September delivery dropped 2.2 percent on ICE Futures U.S. in New York on Wednesday, to $2,391 a metric ton. Prices are up 26 percent this year.