Cocoa price up by 58.26%
– A bag now sells at GH¢2,070
Government has significantly increased the farmgate price it pays to farmers by 58.26% for the rest of the 2023/2024 season.
The decision, reached in consultation with stakeholders, moved the price per tonne to GH¢33,120 from GH¢20,928.
The figure translates into GH¢2,070 per bag of 64 kilogramme gross weight.
GH¢2,980 per tonne buyers’ margin
The government has also approved a review of the Buyers’ margin to GH¢2,980 per tonne for the rest of the 2023/24 cocoa season.
This increase is expected to cushion the LBCs against the increase in finance cost due to an increase in the producer price of cocoa.
The new price and margins took effect from Friday, April 5, 2024.
This follows a similar move by Ivory Coast, the top producer, which raised its prices by 50% to 1,500 CFA francs ($2.48) per kilogramme for its mid-crop harvest.
First 63.5% increment
This is the second producer price increase following an earlier 63.5% increase.
Previously, the price surged from GH₵12,800 to GH₵20,943 per tonne.
Consequently, the per-bag price rose from GH₵800 to GH₵1,308.
Cocoa crossed $10,000 a tonne
The hikes come in response to cocoa futures prices more than doubling this year, crossing $10,000 a tonne due to a drop in output from both countries caused by adverse weather, disease, and fertilizer shortages.
3rd consecutive year of shortages
The surge in cocoa futures to over $10,000 a tonnes, before slightly retracting, is attributed to a global market facing its third consecutive year of shortages.
Factors causing shortage in supply
This situation is exacerbated by reduced outputs in Ivory Coast and Ghana due to unfavorable weather conditions, diseases affecting crops, and a scarcity of fertilizers.
A statement issued by Ghana Cocoa Board (COCOBOD) said the increase in the producer price of cocoa has become necessary to enhance the income of cocoa farmers in line with the vision of the NPP government and in response to the rising prices of cocoa on the international market.
“The welfare of cocoa farmers is dear to the heart of His Excellency Nana Addo Dankwa Akufo-Addo, President of the Republic of Ghana.
336% since 2017
It is for this reason that since the NPP government assumed office in 2017, the producer price of cocoa has been increased by 336% from GH¢7,600 per tonne in the 2016/17 cocoa season to an unprecedented level of GH¢33,120 per tonne for the rest of the 2023/24 cocoa season,” it added.
150% increase in cocoa price this year
The climate crisis impacts on major African producers have skyrocketed cocoa prices by over 150%.
Ghana’s cocoa sector has been under pressure, with bean arrivals at Cocobod’s depots remaining below 400,000 tonnes since the season began.
The country has reportedly lost about 250,000 tonnes to smuggling in the current season, a significant increase from the previous year’s estimate of 150,000 tons.
By increasing the farmgate price, Ghana aims to encourage more deliveries for processing and export, potentially easing the global cocoa shortage.
With supply problems and poor harvests in the Ivory Coast and Ghana, which account for 60% of the world’s cocoa, major buyers are looking to countries like Colombia.
Despite historically lower production levels of around 60,000 tons annually, Colombia may be poised to become a bigger player in global markets.
The decision to raise farmgate prices is also seen as a strategic move to curb the smuggling of cocoa beans to neighboring countries, where farmers can fetch higher prices.
