e world's major cocoa producing countries: Ghana, Brazil, and pices oe bearing the brunt of a cocoa price, which is the lowest since the war, and in real terms, even lower than it was during the depressions On July 21st, the September contract for cocoa on the London terminal market closed at 88/9 a cwt, ‘This is under half what the price was even five months agoe The average price for spot cocoa in 1957, when Ghana gained ‘independence’, was 257/- a cwt, and this was below the average for the decade.
This slump is due to the over dependence of producers on markets controlled by the large chocolate manufacturers of Europe and the UsSehe, the position having come to a head due to record harvests, In the autumn of 1963, a five week conference was held at Geneva, between primary cocoa producers and manufacturerse The primary producers wished to fix a minimum cocoa price at 215/- per cwt, but this was rejected by the manufacturers who contended that "to choose a minimum price of 215/- a ewt would so discourage consumption that it would defeat its very raison d'etre."
Following this failure to get agreement with the manufacturers, primary producers formed the Cocoa Producers Alliance, the six participants of which accounted for 80% of the world's cocoa. The aim was to cut exports once the price of cocoa fell below 190/+ for more than 15 days. The alliance, in theory at least, remained out of the market for more than 3 months. It threatened to burn 20,000 tons (500 tons actually went up in flames), and convert the rest of the surplus to non cocoa uses, All this had little effect, and the major producers returned officially to the market last February. The smaller members of the pact, with limited storing facilities, had been selling for some time before this, Apart from them being unable to stop a small trickle of supplies reaching the mnufacturers, the Alliance had been defeated by the heavy stocks, which the large chocolate manufacturers had been able to keep.. Since then, of course, there has been nothing to stop the steady slither in world prices. ‘The attempt of producers to find another outlet for their beans has not come to much yet.
ie : The effects this slump will have on the economies and living conditions in the primary cocoa producing countries are obvious, and need not be enumerated heree Ghana, for example, where cocoa is the most important export, has been shown once again how little political independence means, while '* the fetters of the colonial economy remain, rendering the country aa vulnerable to metmpoli tan buyers, particularly when harvests reach high : levels. One of the ultimate aims of countries such as Ghana, must be the implementation of Socialist economic plans designed to diversify the economy, and to break it away from the economic stranglehold of external financial interests. In the meantime, an important step would be the setting up of an alliance of all primary producing countries in the third world, which would seek to control the supply of a vast multiplicity. of primary products. The above events demonstrate the futility of alliances of producers of one crop only, as defensive measures.
One further points it can be assumed that British chocolate manufact= urers have been reaping the benefits of the slump prices in cocoa over the past few months, yet there does not seem to have been the sharp falls in retail prices that one might have expected, MNeither has Mr, Brown and his Prices and Incomes: Commission pointed out to them that in the interest of solving the inflationary orisis in Hritain, they should be prepared +o share their good fortunes with others,