5 October 1999
Liberalisation hits cocoa futures

LIBERALISATION in producing countries means that cocoa traders are increasingly focusing on nearby futures positions.

This is at the expense of long-term contracts, says commodities research group LMC International.

It believes the move by producers away from state-controlled marketing boards had shifted price risk to the private sector.

Robert Simmons, head of coffee and cocoa research at LMC, said international trade houses are less willing to enter into forward contracts due to the increased fear of default.

Liberalisation has been advancing rapidly among leading cocoa producers during the past decade, encouraged by the World Bank and the International Monetary Fund.

Ghana is the only country that uses a state organisation for export marketing.