Ghana's cocoa marketing board, Cocobod, announced plans to increase the fixed farmgate price paid to cocoa farmers by up to 50% in response to soaring global cocoa prices. The move aims to ensure farmers benefit from the profit surge and deter bean smuggling.
Over the past year, cocoa prices have more than tripled due to disease and adverse weather conditions in Ghana and neighbouring Ivory Coast, the world's leading cocoa producers. Despite the price surge, the official farmgate prices in both countries have yet to reflect this increase.
Currently, Ghana's state-guaranteed cocoa price stands at 20,943 cedi per tonne or approximately 21 cedi per kilogram. In contrast, Ivory Coast recently raised its farmgate price to 1,500 CFA francs per kilogram for the April-to-September mid-crop of the 2023/24 season.
Fiifi Boafo, Cocobod's head of public affairs, hinted at the possibility of announcing the new cocoa price soon. However, details regarding the exact timing and amount of the increase were not disclosed.
The proposed price hike aims to counteract the impact of Ivory Coast's recent increase and curb smuggling activities. While welcomed by cocoa buyers as long overdue, the increment is expected to raise operational costs for industry players.
Ghana's cocoa production has faced numerous challenges in recent years, including adverse weather conditions, smuggling, and disease. Cocobod estimates significant losses to smuggling and cocoa swollen shoot virus, underscoring the urgency of measures to support cocoa farmers and safeguard the industry's sustainability.
As Ghana seeks to navigate these challenges and capitalize on rising global cocoa prices, the proposed increase in farmgate prices signals a commitment to support cocoa farmers and address the economic dynamics affecting the cocoa sector.