Ghana’s Cocoa Marketing Board (Cocobod) is set to raise the price paid to cocoa farmers for their produce by 50% to share extra profit from rising global prices. A spokesperson from Cocobod relayed the information.
According to Reuters, Cocoa prices have more than tripled in the last year due to adverse weather and disease affecting the output of cocoa farmers pushing the global market to a third successive deficit.
Before this announcement, the official price Cocoa growers in Ghana and Ivory Coast who supply about 60% of the world’s cocoa produce can charge for their produce was yet to reflect the current price surge in the global market.
Ghana’s state-guaranteed cocoa price is currently at 20,943 cedis ($1,574.66) per tone or around 21 cedis per kilogram.
Ivory Coast president on Tuesday announced that he was increasing Cocoa prices in the country to 1,500 CFA francs ($2.47, or around 33 cedi) per kg for the April-to-September mid-crop of the 2023/24 season, up from 1,000 CFA francs last season.
Fiifi Boafo. The head of Public Affairs at Cocobod said the new prices could be announced as soon as this week and didn’t comment further.
An anonymous cocoa exporter told Reuters that the Minister of Food and Agriculture would meet cocoa sector stakeholders on Wednesday afternoon.
“This is a mid-term price and it has nothing to do with next year’s price,” the exporter said.
Another source conversant with the strategy of Cocobod said that Ghana’s price hike is a response to Ivory Coast’s recent price hike with concerns of smuggling being one of the key factors for the decision.
Several licensed cocoa buyers from Ghana welcomed the price increment stating it is long overdue but pointed out that it will affect their cost of operation.
Cocoa production in Ghana has faced multiple challenges over the years drastically affecting the total output in the West African country.
Cocobod said it lost about 150,000 tonnes of Cocoa to smuggling and illegal gold mining in the 2022/23 season. It anticipates an increase in these losses as the rising global prices serve as an increased incentive for smugglers.
Recommended reading: Ivory Coast President Set to Increase Cocoa Price by 50%
What To Know
- Ghana is the second-largest producer of cocoa in the world and its output has been severely affected by strong winds, scant rain, smuggling, and disease contributing to a third consecutive deficit in the global cocoa market.
- According to Cocobod, a disease known as cocoa swollen shoot virus, which causes yields to drop and kills cocoa trees, wiped off about 590,000 hectares of farmland between 2018 and February 2024.
- Recently Nairametrics reported that Ivory Coast, another heavy-weight cocoa producer increased its cocoa price by 50% too. Ghana increased theirs in response to prevent smuggling, one of the key challenges the sector faces in the country
