Ghana is poised to raise the state-guaranteed price paid to cocoa farmers by nearly 45% for the 2024/25 crop season, according to two sources familiar with the price review process.
This increase is part of a broader strategy to enhance farmers’ earnings and reduce the smuggling of cocoa beans out of the country.
Previously, Ghana, the world’s second-largest cocoa producer, had raised the farmgate price by over 58% in April, setting it at 33,120 cedis ($2,123.08) per metric ton, or GH¢2,070 per 64 kilograms, for the remainder of the 2023/24 season.
This mid-season adjustment followed a similar move by neighboring Ivory Coast, the leading cocoa producer, which had raised its farmgate price to 1,500 CFA francs (US$2.55) per kilogram for the April-to-September mid-crop of the 2023/24 season, up from 1,000 CFA francs the previous year.
According to a source cited by Citi News, Ghana’s cocoa producer price review committee has proposed a new price of 48,000 cedis per ton, equivalent to 3,000 cedis per 64 kg, for the 2024/25 season. This proposed price represents a nearly 45% increase and is expected to be implemented when the season starts later in September. The decision is pending cabinet approval before an official announcement is made.
The source also noted that while the cabinet is unlikely to alter the committee’s decision, any increase beyond 48,000 cedis per ton could risk a deficit for COCOBOD, Ghana’s cocoa marketing board.
Ghana’s new price will need to align with Ivory Coast’s 2024/25 farmgate price, which has yet to be announced. The two leading cocoa producers are coordinating their farmgate prices and cocoa supplies to strengthen the sector and improve farmers’ incomes.
This year’s strong cocoa prices are attributed to disease and adverse weather in both Ghana and Ivory Coast, which together account for more than 60% of the world’s cocoa supply, resulting in a third consecutive market deficit. On Thursday, the International Cocoa Organisation increased its global cocoa deficit forecast for the 2023/24 season (October-September) to 462,000 tons from 439,000 tons, citing a 45-year low in the stocks-to-grindings ratio.
Initially, COCOBOD planned to start the 2024/25 season on September 1, with a reduced production target of 650,000 tons.
However, sources indicate that the season’s opening will be delayed. The early start was intended to combat bean smuggling driven by low prices and delayed payments to farmers.
Some farmers and licensed buyers have accused both sides of hoarding beans in anticipation of the upcoming price increase.
