Ghana is set to increase 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 is part of efforts to boost farmers’ incomes and curb the smuggling of cocoa beans out of the country.
The world’s second-largest cocoa producer previously raised the farmgate price by over 58% in April to 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 price hike followed a similar move by neighbouring Ivory Coast, the top cocoa producer, which increased 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 season.
One source according to Citi News, revealed that Ghana’s cocoa producer price review committee has set the new price at 48,000 cedis per ton, equivalent to 3,000 cedis per 64 kg of cocoa, for the 2024/25 season, which is expected to begin later in September.
This represents an increase of nearly 45%.
The source mentioned that the decision is awaiting cabinet approval before an official announcement is made.
Both sources requested anonymity as the information is not yet public. The second source noted that the cabinet is unlikely to alter the committee’s decision, adding that increasing the price beyond 48,000 cedis per ton could push COCOBOD, Ghana’s cocoa marketing board, into a deficit.
Ghana’s new price will also need to align with Ivory Coast’s 2024/25 farmgate price, which has not yet been announced.
The two leading cocoa-producing countries have established an initiative to coordinate farmgate prices and cocoa supplies to support the sector and enhance farmers’ incomes.
Cocoa prices have been strong this year due to disease and adverse weather in Ghana and Ivory Coast, which together account for more than 60% of the world’s cocoa supply, leading to a third consecutive market deficit.
On Thursday, the International Cocoa Organisation raised 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.
COCOBOD had initially planned to start the 2024/25 season on September 1, earlier than usual, with a reduced production target of 650,000 tons. However, both sources indicated that the season’s opening will be delayed.
The early start was intended to help curb bean smuggling, which has been driven by low prices and delayed payments to farmers.
Some cocoa farmers and licensed buyers in Ghana have accused both sides of hoarding beans to take advantage of the anticipated price increase in the upcoming season.
Source: Adomonline