GHANA is set to increase the state-guaranteed price for cocoa farmers by nearly 45 percent for the upcoming 2024/25 crop season, according to sources familiar with the price review process. This move aims to boost farmers’ incomes and discourage the smuggling of cocoa beans out of the country, according to a Reuters report.
As the world’s second-largest cocoa producer, Ghana previously raised the farmgate price by over 58 percent to 33,120 cedis ($2,123.08) per metric ton in April for the remainder of the 2023/24 season. This price adjustment came after neighbouring Cote d’Ivoire, the top cocoa producer, increased its farmgate price to CFA 1,500 (around 40 cedis) per kilogramme for the mid-season crop.
According to one source, Ghana’s cocoa producer price review committee has proposed setting the new price at 48,000 cedis per ton, or 3,000 cedis per 64 kilogrammes, for the 2024/25 season, which is expected to begin later in September. This increase would mark a nearly 45 percent rise from the previous price.
The proposed price is awaiting cabinet approval, and while the decision has not been made public, the source indicated that it is unlikely the cabinet will alter the committee’s recommendation. The price is carefully calculated to avoid pushing Ghana’s cocoa marketing board, Cocobod, into a financial deficit. Additionally, Ghana’s price must align with Cote d’Ivoire’s yet-to-be-announced 2024/25 farmgate price.
Ghana and Cote d’Ivoire, the two largest cocoa producers globally, have coordinated efforts to set farmgate prices and manage cocoa supplies to sustain the industry and improve farmers’ livelihoods. The cocoa market has experienced price increases this year due to disease and adverse weather conditions in both countries, leading to a third consecutive global deficit.
The International Cocoa Organisation recently revised its global cocoa deficit forecast for the 2023/24 season, projecting a shortfall of 462,000 tons, the largest in 45 years.
Cocobod had initially planned to launch the 2024/25 season on September 1, with a lower production target of 650,000 tons. However, sources indicated that the season’s opening might be delayed. The early start was intended to combat bean smuggling, which has been exacerbated by low prices and delayed payments to farmers.
There are also reports that some cocoa farmers and licenced buyers in Ghana have been holding onto their beans in anticipation of the expected price increase in the new season.
