African cocoa majors to explore new markets

09 May, 2006

Main African cocoa-growing countries plan to explore new markets in Asia and to boost domestic consumption in a new step to improve supply management and strengthen world prices, they said on Sunday.
West Africa produces about 80 percent of the world's cocoa and those governments are keen to encourage local processing of beans and to reverse a long-term decline in prices in real terms with some form of supply management.
Heads of state or senior representatives from Ivory Coast, Ghana, Nigeria, Cameroon, Gabon, Togo and Sao Tome and Principe, held a summit in Abuja on Saturday to find new ways of tackling cocoa production and export problems.
Africa's top cocoa growers resolved to "promote aggressive market diversification targeting emerging markets like China and India among others," said a statement issued after the summit.
The meeting also agreed to improve Africa's competitiveness in the world market by curbing production and marketing costs. The growers plan to seek greater market access for finished and semi-finished products in major Western consuming countries.
A previous attempt to reverse a long-term decline in prices in real terms, under the auspices of the Cocoa Producers' Alliance at a 1996 conference in Libreville, Gabon, failed because producers broke their quotas.
Prospects for another similar deal are now slim, authorities said.
Officials say current global supply of cocoa is slightly below demand, but prices remain weak because of a massive overhang of beans in consumer-country warehouses.
The Libreville Declaration said that global stocks of beans should not be allowed to rise above 34 percent of annual demand from bean grinders to keep prices at $2,000 per tonne.

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