I spoke with Mr. Kofi Nimako, the operations manager  and Mr. Kwame Owusu, the finance manager of Kuapa Kokoo, Ltd. (KKL), the licensed buying company that forms the commercial arm of the Kuapa Kokoo Farmer’s Union. The system of private licensed buying agents was developed as part of the liberalization projects of the early 1990s (1993). As a matter of fact, KKL came into being as a reaction to this process. There are around 30 licensed buying companies in Ghana but the number fluctuates as new ones emerge while others disappear. KKL is the only cooperative-owned company. Continue reading “On the trail of cocoa in Ghana”
The Basics of Kuapa Kokoo
The Kuapa Kokoo Farmers Union (KKFU) is a cooperative organization for cocoa farmers in Ghana. Its origin lies in the liberalization of the internal cocoa trade implemented by the government of Ghana in the early 1990s. Its founder, Nana Frimpong Abebrese, had represented cocoa farmers at the Cocoa Marketing Board of Ghana and he worried about the impact of liberalization on cocoa farmers throughout the country. Continue reading “The Basics of Kuapa Kokoo”
My Visit to Kuapa Kokoo in Ghana
I’ve been offline for a while because I had the opportunity to visit my favorite cocoa growers cooperative - Kuapa Kokoo – in Kumasi, Ghana. There is lots to report and I will post various bits and pieces here in the coming days. The trip was an amazing experience and the reception by Kuapa Kokoo representatives and members was warm. I had the chance to interview some of the top leadership at the headquarters and visit one of the village societies (the basic building blocks of the cooperative) at Boakyeasua in the Brong-Ahafo Region to the West of Kumasi. Overall, I got great insight into the way the cocoa economy works in Ghana.
Nigeria and the EU
Once upon a time, the European Union dealt with its former colonies (the so-called ACP [African Caribbean Pacific] countries) through the mechanism of the four Lomé Agreements. These provided for non-reciprocal trade relations. The ACP countries were given duty-free access to EU markets (with important exceptions), but they did not have to offer similar concessions to the EU goods. More importantly, through STABEX, the EU provided additional funds that helped ACP countries whose earnings from the exports of primary commodities (like cocoa) dropped due to price fluctuations. Continue reading “Nigeria and the EU”
More Speculation in Cocoa
In my post six days ago, I mentioned the fact that investment funds may be one of the reasons why cocoa prices have been higher over the past year. Just two days ago, the Guardian reported the same development. An unnamed U.S. trader is quoted as saying: “The weight of money from investment funds will dictate prices rather than fundamentals (supply/demand).”
So let me get this straight, investment funds, desperatly seeking profitably investments in the wake of the subprime loan debacle, are sinking money into cocoa futures and options. At the same time, people who pay attention to the cocoa market are predicting that the gap between supply and demand will be much narrower for the current season than it was for the last season. Yes, demand is strong, but supply has not fallen behind. New producers are coming online and existing ones are expanding production.
It seems to me that the speculations of investment funds will only exacerbate the fluctuations of cocoa prices and farmers may well again be left holding the bag.
