Ghana to boost cocoa farmgate price by nearly 45%, sources reveal

Ghana is set to increase the state-guaranteed price paid to its cocoa farmers by nearly 45% for the upcoming 2024/25 crop season, according to two sources familiar with the price review process. The price hike is intended to improve farmers’ incomes and discourage the smuggling of cocoa beans out of the country.

Currently, Ghana is the world’s second-largest cocoa producer. Earlier this year, the government raised the farmgate price by over 58% to 33,120 cedis ($2,123.08) per metric ton, or 2,070 cedis per 64 kilograms, for the remainder of the 2023/24 season. This increase followed a similar move by Ivory Coast, the world’s top cocoa producer, which raised its farmgate price to 1,500 CFA francs (US$2.55), or about 40 cedis, per kilogram for the April-to-September mid-crop of the same season, up from 1,000 CFA francs in the previous season.

One source revealed that Ghana’s cocoa producer price review committee has set the new price at 48,000 cedis per ton for the 2024/25 season, equivalent to 3,000 cedis per 64 kilograms of cocoa. This represents an increase of just under 45%. The decision is expected to be presented to the cabinet for approval before an official announcement is made.

The second source indicated that it is unlikely the cabinet will alter the committee’s recommendation, noting that increasing the price beyond 48,000 cedis per ton could push Cocobod, Ghana’s cocoa marketing board, into a financial deficit. Additionally, the source mentioned that Ghana’s price will need to be aligned with Ivory Coast’s farmgate price for the 2024/25 season, which has yet to be announced.

Ghana and Ivory Coast, the two largest cocoa-producing countries, have coordinated their farmgate prices and cocoa supplies through a joint initiative aimed at sustaining the sector and improving farmers’ livelihoods.

This year, cocoa prices have remained strong due to disease and adverse weather conditions in both Ghana and Ivory Coast. These challenges have led to a third consecutive global cocoa market deficit. The International Cocoa Organization recently raised its global cocoa deficit forecast for the 2023/24 season to 462,000 tons, up from 439,000 tons, marking a 45-year low in the stocks-to-grindings ratio.

Cocobod had initially planned to launch the 2024/25 season on September 1, earlier than usual, with a reduced production target of 650,000 tons. However, both sources confirmed that the season’s opening has been delayed. The decision to start the season earlier was intended to curb bean smuggling, which has been fueled by low prices and delayed payments to farmers.

Some cocoa farmers and licensed buyers in Ghana have accused various stakeholders of hoarding beans in anticipation of the proposed price increase for the new season.

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