Ghana and Côte d’Ivoire to Cooperate on Cocoa Prices

The Ivorian President Gbagbo’s two-day visit to Ghana ended with a joint communique expressing the two countries’ resolve to influence international cocoa prices.  The communique pointed out that increases in production have not yielded comparative increases in revenue for the countries. It further criticized the impact of global commodity cartels on cocoa prices. Finally, Gbagbo and Ghanaian President Mills reaffirmed their support for moving the headquarters of the International Cocoa Organization (ICCO) from London to Abidjan.

Given the two countries’ powerful position in the world cocoa market–they produce more than half the world’s cocoa–it is only natural that they should want to use that power to influence prices. However, there is little historical evidence that such strategies  work. During 1988-89 cocoa year and in the midst of a global cocoa price collapse, then Ivorian president Houphouët-Boigny prohibited the Caisse the Stabilisation from exporting cocoa in the hope of pushing prices up. The effort failed. He searched the world over to find a buyer and  ended up making a deal with a French company for 400,000 tonnes. The price was never disclosed but there were allegations that the French government subsidized the purchase (for more on this see: Richard Crook, “Politics, the Cocoa Crisis and Administration in the Cote d’Ivoire,” Journal of Modern African Studies 28, no. 4 (1990): 659-60).

It remains to be seen if collusion on prices during the current up-market will have different results. Ghana is currently able to manipulate exports since its COCOBOD is the sole exporting authority. The situation in the Côte d’Ivoire is different. Since its liberalization of the cocoa sector, exporters operate outside state control. In this context, the announcement that the Côte d’Ivoire plans to re-regulate the cocoa sector assumes added importance.

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