Ghana is set to raise the state-guaranteed price paid to cocoa farmers by nearly 45% for the upcoming 2024/25 crop season, according to sources familiar with the government’s price review process. The anticipated increase, which would elevate the farmgate price to ¢48,000 per metric ton, aims to bolster farmers’ incomes and curb the smuggling of beans out of the country.
This significant price adjustment follows a mid-season hike earlier this year, which saw the farmgate price rise by over 58% to ¢33,120 per metric ton. The move comes in response to a similar increase by neighboring Ivory Coast, the world’s largest cocoa producer, which raised its farmgate price to 1,500 CFA francs per kilogram for the 2023/24 mid-crop season.
The proposed price hike, which has yet to be publicly announced, is currently awaiting cabinet approval. However, sources suggest it is unlikely that the cabinet will deviate from the committee’s decision, as any further increase could risk pushing Cocobod into a deficit.
The new pricing strategy is also intended to align with Ivory Coast’s farmgate price for the 2024/25 season, which has yet to be disclosed. Both countries, which collectively account for more than 60% of global cocoa production, have collaborated to coordinate farmgate prices and cocoa supplies in an effort to stabilize the sector and improve farmers’ earnings.
The global cocoa market has been under pressure this year due to adverse weather and disease outbreaks in Ghana and Ivory Coast, leading to a projected global deficit of 462,000 tons for the 2023/24 season. The International Cocoa Organization recently highlighted that the market is approaching a 45-year low in the stocks-to-grindings ratio.
Cocobod had initially planned to launch the 2024/25 season on September 1, with a reduced production target of 650,000 tons. However, sources indicate that the season’s opening will be delayed, as the government seeks to address issues related to bean smuggling, which has been exacerbated by low prices and delayed payments to farmers.
Source:norvanreports.com