Ivory Coast, Ghana to publish cocoa premium to highlight price shortfall

May 17 (Reuters) - From the end of May, Ivory Coast and Ghana will publish every month the premium paid by chocolate-makers and cocoa merchants for high-quality cocoa in a bid to achieve a minimum floor price for the benefit of farmers, a joint statement said on Tuesday.

The two West African countries, which together produce more than 60% of the world’s cocoa, have struggled to ensure a living wage in the sector, where low prices encourage deforestation and child labour.

The countries’ cocoa boards said buyers had been negotiating down the so-called origin differential since the introduction of another premium to support farmers in 2019. Combined with market fluctuations, this has eroded the hoped-for income boost for producers.

By publishing the figures on a monthly basis, Ivory Coast’s Coffee and Cocoa Council (CCC) and Ghana’s regulator COCOBOD said they hoped to bring greater transparency and achieve the minimum price of $2,600 per tonne as intended since 2019.

“It has become necessary to re-engage with key stakeholders and partners ... to immediately deliver a minimum floor price of $2,600/MT as originally planned,” they said in a declaration read at a news conference in Abidjan by the initiative’s executive secretary Alex Assanvo.

In June 2019, Ivory Coast and Ghana established the $2,600 floor price and the so-called Living Income Differential (LID) of $400 per tonne to tackle poverty among farmers, many of whom earn well under $1 a day.

Since then, according to two industry sources, the origin differential has fallen to around minus $155 per tonne in Ivory coast and minus $125 in Ghana from around $300 and $200 respectively.

“Today, the differentials being negative, the impact of the LID on the price guaranteed to producers has almost no effect on the income of farmers who should have experienced a significant increase,” the cocoa boards said.

“The origin differentials will be published ... as a step toward delivering greater transparency to a key element of the cocoa price,” they said. ($1 = 0.8025 pounds) (Editing by Alessandra Prentice; editing by David Evans)