Cocoa-growing countries will fight a price rout by banding together and co-ordinating production strategies, the International Cocoa Organisation (ICCO) has said.
Speaking after an emergency meeting held by members of the group after a dramatic fall in prices, ICCO’s chairman Luis Valverde told reporters in Adidjan, Cote d’Ivoire’s commercial capital, that the cocoa industry was now in a state of emergency.
“We are in a crisis, in a price crisis,” he said.
“The last six months have been terrible, and the forecast is even worse.”
Cocoa futures in New York have plunged more than 40% in the past year—their lowest in four years—amid a worldwide glut caused by bumper harvests in West Africa.
Valverde said growers in the cocoa industry were planning to coordinate production to control supply and would work together to solve the crisis.
“The number one point that we all agree is that all the decisions that we make regarding our production are not as they used to be,” he said.
“We cannot make sole decisions, we must make decisions as a group.”
The plummeting prices have been hurting the finances of producing nations and the incomes of hundreds of thousands of small-scale farmers, according to Reuters.
Cote d’Ivoire, the world’s top grower, has reduced the minimum price paid to farmers by 36% and cut the size of the harvest.
The West African nation was also forced to trim its 2017 budget by a tenth, president Alassane Ouattara said last week.
Joseph Boahen Aidoo, CEO of the Ghana Cocoa Board, told reporters the price had cost his country, the world’s second largest producer, almost $1bn in export revenues.
Luc Magloire Mbarga Atangana, Cameroon’s commerce minister, said the price decline had affected 600,000 households that make a living from cocoa.
Other commodities have recently been saddled by oversupply in recent years. In markest such as crude oil producers have been able to stem the price losses by agreeing on output cuts.
Valverde added that in addition to coordinating production, the nations were also discussing strategies to foster increased consumption.
“In order to reduce this crisis, we cannot only see and analyse our production,” he said.
“We need to increase consumption within our countries, and the market must be more transparent when it comes to demand data.”