Cocoa Council makes declaration on current cocoa market situation
Accra {Greater Accra} 25 March 2000.
The International Cocoa Council (ICCO) has called on the World Bank and the International Monetary Fund (IMF) to assist cocoa producing countries to find suitable ways of marketing their produce in the framework of a liberalised system.
The ICCO said this would create confidence between operators in the cocoa production chain, avoid the detrimental effects of exclusive spot markets and establish fully the conditions for forward sales to avoid the downward pressure of the cocoa market.
In an eight-point declaration issued after the 61st regular meeting of the Council in London and released in Accra on Friday, it said the Bank must also improve prospects for the international cocoa market in the medium to long-term period through the promotion of cocoa consumption in the areas of low consumption, and in producing countries themselves in liaison with the private sector.
Mr. J. H. Newman, Chief Executive of COCOBOD, led the board's three-man delegation. Also in attendance was Mr. J.E.K. Aggrey-Orleans, Ghana's High Commissioner to London.
The declaration, which was arrived at against the background of the current market situation of plummeting prices, asked the World Bank to encourage policies for diversification in order to reduce the impact of price fluctuations on the economies of producing countries.
The declaration emphasised the need to continue the application of the production-management plan within the International Cocoa Agreement leading to equilibrium between supply and demand at remunerative prices.
In order to eliminate sub-grade cocoa from the chain and improve quality in the short to medium-term, the Council requested the World Bank and the IMF to take the necessary steps to foster co-operation between producers and consumers.
The Council said the declaration was arrived at after considering the drastic fall in prices to SDR 639 (569 pounds) per tonne of cocoa beans in February 2000.
The figure is the lowest point in 27 years.
It said it also took the decision having reviewed the current cocoa situation and noting that the evolution of the fundamental parameters of the market cannot alone justify such drastic decrease in prices.
The meeting also considered the detrimental effect of the situation on the cocoa economy, particularly in producing countries as well as the near disappearance of forward sales in Cote d'Ivoire following full liberalisation of the sector in that country that has accentuated the downward pressure on prices.
The Council said the situation is a confirmation of fears it expressed on the possible effects of liberalisation on the world cocoa economy to the World Bank and IMF in 1995.
The Council, therefore, requested that the declaration be transmitted to all members and observers and all lending institutions involved in the cocoa sector and to organise appropriate contacts with those institutions and countries concerned.
GRi../