This implies that cocoa farmers in the top two producing countries are expected to receive $1,820 per tonne of cocoa beans sold if the floor price is held constant at $2,600.
The farmers will also be protected from any significant drop in prices on the international world market.
This is coming after the two countries agreed on a living income differential for the producers of the cash crop.
The two countries at a meeting in Abidjan on July 3, 2019, agreed on an additional $400 per tonne price for cocoa going forward.
This is to ensure that the minimum floor price of $2,600 per tonne for the commodity is achieved at any moment in time.
The CEO of COCOBOD, Joseph Boahen Aidoo told the media that the move should improve the welfare of farmers.
“Last year, we produced around 900,000 metric tonnes so with the constant fixed extra $400, this will have fetched this country $360m and this is outside the terminal market price…In a way, it is a form of redistributing income along the cocoa supply chain. We all know that those in the upper level of the industry have been making huge profits and at the lower level where our farmers belong, they have been taking unremunerative prices,” he said.
Mr. Aidoo also indicated that Ghana and Cote D’Ivoire have initiated plans to set up a stabilisation fund to cater for extreme drop in prices of cocoa on the international market.
For the stabilisation fund, an achieved price in excess of 3,000 dollars for any production year will be channeled for further distribution in times of price drop on the international market.