Ghana to raise cocoa farmgate price by nearly 45% for 2024/25 season
The Government of Ghana is set to significantly increase the state-guaranteed price paid to cocoa farmers by nearly 45% for the upcoming 2024/25 crop season. According to sources familiar with the price review process, this move is aimed at boosting farmers’ incomes and curbing the smuggling of cocoa beans out of the country.
Ghana, the world’s second-largest cocoa producer, previously raised the farmgate price by over 58% to ¢33,120 ($2,123.08) per metric ton, or ¢2,070 per 64-kilogram bag, in April for the remainder of the 2023/24 season. This mid-season price hike came after neighboring Ivory Coast, the top cocoa producer, increased its farmgate price to 1,500 CFA francs (approximately $2.55), or around ¢40 per kilogram, for the April-to-September mid-crop of the 2023/24 season.
One source revealed that Ghana’s cocoa producer price review committee has pegged the new price at ¢48,000 per ton, which translates to ¢3,000 per 64-kilogram bag of cocoa for the 2024/25 season, set to begin later in September. This represents an increase just shy of 45%. The decision is expected to be sent 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 decision, adding that any further increase beyond ¢48,000 per ton could push the Ghana Cocoa Board (Cocobod) into a deficit. The source also noted that Ghana’s price will need to align with Ivory Coast’s 2024/25 farmgate price, which has yet to be announced. The two largest cocoa-producing countries have established an initiative to coordinate farmgate prices and cocoa supplies to sustain the sector and boost farmers’ incomes.
Cocoa prices have remained buoyant this year, driven by disease and adverse weather conditions in Ghana and Ivory Coast, which together supply more than 60% of the world’s cocoa. These challenges have contributed to the market’s third successive 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, indicating the market is heading towards 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 indicated that the opening will be delayed. The earlier launch was intended to mitigate bean smuggling, which has been exacerbated by low prices and delayed payments to farmers.
Some cocoa farmers and licensed buyers in Ghana have accused both sides of hoarding beans to benefit from the anticipated price hike in the new season. This development adds another layer of complexity to the challenges facing Ghana’s cocoa sector as it navigates market dynamics and works to ensure fair compensation for its farmers.
Credit: Reuters
