The newly-formed International Cocoa Council began its inaugural session in Geneva, Switzerland, on Monday (30 July) against a background of uncertainty in world commodity markets.
GHANA (FILE - 1966)
GV & CU Cocoa pods knocked off tree (4 shots)
SCU Woman breaks pods open
LVs & STV Sacks of cocoa carried from warehouse to trucks
Background: The newly-formed International Cocoa Council began its inaugural session in Geneva, Switzerland, on Monday (30 July) against a background of uncertainty in world commodity markets.
The Cocoa Council is made up delegates representing forty-one countries which have signed the International Cocoa Agreement.
The Agreement -- concluded last October after negotiations spread over sixteen years -- aims to prevent excessive fluctuation in the world market price of cocoa. Its main features are an export quota system, a fixed price-range and a buffer stock mechanism to regulate supplies coming onto the market.
Wide price instability -- from year to year and even from week to week -- is the major difficulty facing cocoa producing countries, many of which rely on cocoa exports for a significant share of their foreign exchange earnings.
The Agreement fixed a price range for cocoa from 23 United States cents to 32 cents a pound (0.454 kilos), and late last year the actual market price was close to these limits. But since then it has more than doubled, with the current market price over 70 cents a pound.
The Director of the Commodities Division of the United Nations Conference on Trade and Development (UNCTAD), Mr. Bernard Chidzero, said the International Cocoa Council at its first session would have to consider whether to change the Agreement because of the new economic circumstances.
Mr. Chidzero told the Council an almost entirely new situation had been created by relative shortages and speculation on world commodity markets, high prices, inflation and uncertainty about the world monetary system.