Why is China’s cocoa pricier? - Oteng-Gyasi calls for investigation

An industrialist and economist, Mr Tony Oteng-Gyasi, has called for urgent investigations into how China earned a better price for its first consignment of cocoa export than what Ghana received for its premium cocoa beans.

He told the Graphic Business on April 23 that the investigations must be immediate and help to establish why 500 kilogrammes (kg) of the bean fetched China $3,600 when Ghana and Cote d'Ivoire, which produced more than half of the world's cocoa, currently receive an average of $2,400 for a tonne of cocoa.

One tonne is equivalent to 1,000kg.

"The Ghana Cocoa Board (COCOBOD) should not take this without an investigation," Mr Oteng-Gyasi, who chairs the Board of the  Ghana Integrated Aluminium Development Corporation (GIADEC), said in an interview.

China exports

The former President of the Association of Ghana Industries (AGI) said this when he spoke to the paper on recent revelations that China exported 500kg of cocoa to Belgium earlier this month.

The Chinese national newspaper, China Daily, reported in October last year that the Asian giant received $3,600 for the first consignment that was produced in the Hanai Province.

It said the export of the beans followed a successful harvesting of cocoa, which Ghana is currently the second largest supplier in the world and the only producer of premium quality beans.

Major producer

The founder of the Tropical Cable and Conductor Limited (TCCL) said as a major exporter of cocoa,  the price at which China sold its cocoa must concern Ghana even more than the potential entry of the Asian nation into the cocoa league table. 

"When I heard the news, what struck me was the price they said they got. They exported just 500kg and they got $3,600, which implies a price per tonne of $7,200, but we are selling our cocoa at $2,400 per tonne currently."

"Their price is far better than our price even with our historic living income differential (LID) added. Why should they be getting a better price than we are getting? As a major producer, that is one thing that we should be interested in," the former Chairman of the University of Ghana Council noted.

"Is it organic cocoa or does it have some quality which attracts such a high price?" he asked.

The industrialist said answers to these questions were relevant to Ghana but could only be established when a full-scale investigation was launched into the sale and the pricing mechanism that guided it.

He said the outcome of the investigation should help inform how the country could raise earnings per tonne from cocoa to improve the lives of farmers and drive national development.

Cocoa price

Data from the Bank of Ghana (BoG) showed that in October last year when the Chinese media reported that the country had exported cocoa to Belgium, a tonne of cocoa was selling around $2,432 in the international market

The country, however, realised an average of $2,197 from the sale of every tonne of its premium beans in that month, according to the central bank's summary of financial and economic data.