Côte d’Ivoire and Ghana are planning to introduce a production ceiling to support cocoa prices and prevent over-production following the introduction of a floor price and living income differential.
Since the concept of a floor price and living income differential (LID) were introduced, concern has been expressed that they could cause farmers to grow more cocoa, and that over-production could adversely affect prices.
Speaking at last week’s European Cocoa Forum in Lisbon, which C&CI attended, Joseph Boahen Aidoo, CEO of the Ghana Cocoa Board (Cocobod), said both countries planned to introduce a ceiling on production, but said it would be inappropriate at present to comment on what that ceiling might be.
Mr Aidoo said the ceiling needed to be approve by Ghana’s parliament first.
Also speaking at the event was Côte d’Ivoire’s Director General of the Conseil Cafe Cacao (CCC), Brahima Yves Kone. He confirmed that the ceiling would also need to be approved by the authorities there.
Among the representatives of the cocoa and chocolate industry expressing concern about the possible effect of the floor price and the LID, was European Cocoa Association chairman Steven Retzlaff.
Speaking on behalf of ECA members, Mr Retzlaff said it was important that supply and demand remain in balance.
Mr Retzlaff asked what practical measures both countries were taking to limit production. Mr Kone said Côte d’Ivoire was registering all cocoa farmers, a process that is expected to be completed by 2020.
“We will keep track of production,” he said. “No-one will enter the sector without permission from Cocobod.”