GHANA’S cocoa marketing board, Cocobod, revealed on Wednesday its intention to hike the fixed farmgate price paid to cocoa farmers by up to 50 percent, aiming to address escalating global prices and deter illicit bean smuggling. The move comes amidst a surge in cocoa prices, which have more than tripled over the past year due to disease and adverse weather conditions in Ghana and neighbouring Cote d’Ivoire, the two leading cocoa-producing countries.
While global cocoa prices have soared, the official farmgate prices in Ghana and Cote d’Ivoire, which collectively supply over 60 percent of the world’s cocoa beans, have yet to reflect this significant surge. Currently, Ghana’s state-guaranteed cocoa price stands at 20,943 cedi ($1,574.66) per tonne or approximately 21 cedi per kilogram.
In response to Cote d;Ivoire’s recent farmgate price hike for the April-to-September mid-crop of the 2023/24 season, Cocobod is considering raising Ghana’s cocoa prices to neutralise the impact and deter smuggling activities. Although the exact details of the new price hike are yet to be disclosed, Fiifi Boafo, the head of public affairs at Cocobod, hinted that an announcement could be imminent.
‘This is a mid-term price and it has nothing to do with next year’s price,’ a cocoa exporter familiar with the matter, highlighting the short-term nature of the adjustment, told Reuters.
Several licensed cocoa buyers in Ghana welcomed the proposed increment as long overdue, acknowledging its potential to alleviate the financial strain on cocoa farmers. However, concerns have been raised about the potential increase in operational costs for buyers.
Ghana’s cocoa production has faced significant challenges over the past few years, including adverse weather conditions, smuggling, and disease outbreaks. Cocobod reported losses of about 150,000 tonnes of cocoa beans to smuggling and illegal gold mining in the 2022/23 season alone, with even greater losses expected in the current season due to rising global cocoa prices.
Despite these challenges, Ghana remains committed to revitalising its cocoa sector and safeguarding the interests of cocoa farmers. The proposed increase in farmgate prices signals the government’s proactive stance in addressing market dynamics and ensuring the sustainability of the cocoa industry.
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