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Cocoa’s OPEC Moment Puts Market on Track for Boom and Bust

  • Price premium may curb demand, encourage overproduction
  • Move comes ahead of Ivory Coast and Ghana elections next year
These Asian Chocolatiers Are Spicing Up the Global Sweets Scene
Photographer: Nadirah Zakariya/Bloomberg
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The world’s two biggest cocoa producers are taking unprecedented steps to exert more control on the market in a bid to help farmers. The problem is they could end up doing the exact opposite.

Ivory Coast and Ghana are jointly introducing a premium of $400 a metric ton to their sales, a so-called living-income differential. The move could end up encouraging growers to boost production just as high prices curb consumption, setting the industry up for a dangerous boom-and-bust scenario, traders and analysts say.