Negotiations leading to the seventh International Cocoa Agreement (ICCA) got underway in Yaounde, Cameroon in late March. ICCAs are general agreements that are supposed to foster cooperation between producer and consumer countries, encourage sustainable cocoa farming and help producer countries. Over the years, these agreements included market intervention mechanisms such as buffer stocks to smooth out cocoa price fluctuations but since the 1990s, such mechanism have been eliminated in favor of increased information dissemination and reliance on market mechanism.
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.
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ICCO and Markets Agree: Cocoa Might be in Short Supply
The International Cocoa Organization (ICCO) cut its forecasted surplus for the next cocoa year from 100,000 to 25,000-50,000 tons. In an interview along the sidelines of the ICCO meeting in London, the ICCO’s chief, Jan Vingerhoets, pointed out that the economic recession may be ending sooner than expected, leading to higher demand. In addition, cocoa production for the next cocoa year starting on October 1 may well be lower than anticipated. The effects of El Niño on Indonesia and Ecuador may lower production in these countries and the Côte d’Ivoire continues to struggle with pests and diseases.
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El Niño and Chocolate
Cocoa news just keeps getting worse. After a less than stellar production for the main season in Africa, several predictions claim that future output will also be lower than expected.
Chocolate Apparently Not Recession-Proof After All
Quite a few reports recently claimed that chocolate is recession-proof. It made sense, sort of. When everything else is going down the tube, there’s always chocolate–a little treat in hard times and not too expensive. But it it turned out to be just hearsay.
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