By Ghana plans to increase the fixed farmgate price paid to cocoa farmers by up to 50% to reflect rising global cocoa prices and discourage bean smuggling, according to a spokesperson at the country’s cocoa marketing board, Cocobod.
This move comes as cocoa prices have more than tripled over the last year due to disease and adverse weather conditions in Ghana and neighbouring Ivory Coast, leading to a third successive deficit in the global market.
Despite the surge in cocoa prices, the official farmgate price for growers in Ghana and Ivory Coast has not yet been adjusted. Currently, Ghana’s state-guaranteed cocoa price stands at 20,943 cedi ($1,574.66) per tonne or around 21 cedi per kilogram.
In a similar vein, Ivory Coast recently raised its farmgate price to 1,500 CFA francs ($2.47, or around 33 cedi) per kilogram for the April-to-September mid-crop of the 2023/24 season, up from 1,000 CFA francs last season.
Fiifi Boafo, the head of public affairs at Cocobod, stated that the new price could be announced as early as this week but refrained from providing further details.
A cocoa exporter, who preferred to remain anonymous, mentioned that the Minister of Food and Agriculture is scheduled to convene with cocoa sector stakeholders on Wednesday afternoon.
“This is a mid-term price and it has nothing to do with next year’s price,” the exporter said.
A source familiar with Cocobod’s thinking said Ghana was aiming to “neutralise” the impact of Ivory Coast’s price hike, given its potential impact on smuggling.
Contacted by Reuters on Wednesday, several of Ghana’s licensed cocoa buyers welcomed the proposed increment as long overdue but said it will increase their cost of operations.
Cocoa production in Ghana, the world’s second-largest producer, has faced significant challenges over the past four years. Output is anticipated to fall nearly 40% below target in the 2023/24 season due to various factors including strong winds, insufficient rainfall, smuggling, and disease.
According to Cocobod, approximately 150,000 tonnes of cocoa beans were lost to smuggling and illegal gold mining, locally known as galamsey, during the 2022/23 season. The regulator foresees even greater losses in the current season as escalating global cocoa prices provide a stronger incentive for such activities.
Cocobod reported that the cocoa swollen shoot virus, which reduces yields and kills cocoa trees, has devastated approximately 590,000 hectares of farmland between 2018 and February 2024.
