Ghana’s cocoa farmers are in for a welcome boost as the country’s cocoa marketing board, Cocobod, announced plans to raise the fixed farmgate price they receive for their beans by up to 50%.
This move aims to address two key issues: sharing profits from the recent surge in global cocoa prices and deterring cocoa bean smuggling.
The global cocoa market has seen prices more than triple in the past year due to disease and adverse weather conditions in Ghana and neighboring Ivory Coast, the world’s top two cocoa producers.
However, the official farmgate price that farmers receive in these countries hasn’t reflected this increase.
Currently, Ghana’s guaranteed price sits at 21 cedis per kilogram, significantly lower than the new price expected to be announced as early as this week.
This increase comes after Ivory Coast raised its own farmgate price to 33 cedis per kilogram, potentially incentivizing smuggling across the border.
While details are still emerging, the new price is expected to be a temporary measure for the mid-crop season and won’t affect the price for next year’s harvest.
Although welcomed by cocoa buyers, concerns remain about the impact on operational costs.
Ghanaian cocoa production faces significant challenges, with output expected to fall nearly 40% short of target in the current season.
Smuggling, disease, and unfavorable weather conditions are all contributing factors.
Cocobod estimates losing 150,000 tonnes of cocoa beans to smuggling in the previous season, and expects even greater losses this year due to the higher global prices.
