Freight rates for cocoa shipment to Europe slashed
The Ghana Shippers Authority and shippers ferrying Ghana’s cocoa exports to Europe have agreed to cut their freight charges by 9.4 per cent for the 2018/2019 cocoa season.
The rate for shipment to the United Kingdom (UK) and other European countries has been reduced from £39 to £35 per tonne.
However, the rates for shipments to North America, Mediterranean countries and the Far East have been maintained at €48, €54 and $86.91, respectively.
The slash in the freight rate became necessary due to the recent fall in the prices of cocoa on the international market.
Prices of cocoa beans declined by 40 per cent in the last crop season.
Ghana News Headlines
For latest news in Ghana, visit Graphic Online news headlines page Ghana news page
But due to the recent surge in oil prices and other related carrier charges, the bunker adjustment factor (BAF) was increased by 25 per cent.
This was disclosed by the Chief Executive Officer (CEO) of the Ghana Shippers Authority (GSA), Ms Benonita Bismarck, when she spoke to the Daily Graphic after a three-day cocoa freight negotiation conference which was held for the first time in Ghana.
She said the new rates were reached after negotiations with shipping lines present at the conference and upon consideration of the various issues raised during the deliberations.
Ms Bismarck said looking at the prices of cocoa on the global market, it was important that the authority and the shippers take another look at the freight charges to ensure that Ghana did not suffer the bad effects.
She said the authority also did not want to price the shipping lines out of the market by way of their profits.
“We, therefore, looked at all the proposals that were submitted to us in the light of what is happening on the global scene. A lot of them were asking for a 30 per cent increase in the BAF but we thought we should meet them half way by increasing it by 25 per cent,” she explained.
Mr Joe Forson (right) and Ms Benonita Bismarck (2nd right) at the cocoa freight conference in Accra
Conditions for shipments
Ms Bismarck also outlined other conditions of shipments that were agreed on.
With the new conditions agreed on, the shipping lines are to supply dressing materials, position empty containers at the cocoa stuffing areas and bear lift on and lift off cost.
The Cocoa Marketing Company (CMC), on the other hand, is obliged to carry out the dressing and stuffing of containers, delivery of full boxes to named places and terminals and fumigation of empty laden containers.
The Managing Director of the CMC, Mr Joe Forson, said the reduction in the freight rates would save the country millions of dollars.
“We ship around 700,000 tonnes annually and so we were able to leverage on that to bring the freight down by 9.4 per cent,” he said.
On the BAF charges, he said the cost of carriages had really gone up, as the Ghana Ports and Harbours Authority (GPHA) had increased its rate and crude oil prices were up by 30 per cent.
Mr Forson said it was, therefore, not possible for the CMC to negotiate for a decrease in the BAF charge.
“They were asking for an increase of 30 per cent but the CMC is a volume service provider and so we leveraged on that to negotiate for 25 per cent,” he said.
On Ghana hosting the conference for the first time, Mr Forson said it gave the CMC some leverage in negotiation, adding that there were plans to host the next event.
A communiqué issued at the end of the conference said the delivery of allocation letters to shipping lines was to be expedited to minimise delays and associated costs to make for quicker and more efficient shipment.
It also recommended that the shipment of cocoa be prioritised by the GPHA, and that in the medium to long term, dedicated berths should be allocated for cocoa shipments.
The communiqué again recommended that the GSA should facilitate engagements with the GPHA and other relevant industry stakeholders to address issues related to the shipment of cocoa.