Ghana is set to raise the state-guaranteed price paid to cocoa farmers by nearly 45% for the 2024/25 crop season, according to two sources familiar with the price review process.
This increase aims to improve farmers’ incomes and curb the smuggling of cocoa beans out of the country.
Earlier this year, Ghana, the world’s second-largest cocoa producer, raised the farmgate price by over 58% to 33,120 cedis ($2,123.08) per metric ton, or 2,070 cedis per 64 kilograms, for the remainder of the 2023/24 season.
This mid-season adjustment followed a similar move by Ivory Coast, the top cocoa producer, which increased its farmgate price to 1,500 CFA francs (around 40 cedis) per kilogram for the April-to-September period.
One source revealed that Ghana’s cocoa producer price review committee has set the new price at 48,000 cedis per ton, which equates to 3,000 cedis per 64 kilograms for the upcoming 2024/25 season, expected to begin later in September. This represents an increase of just under 45%.
The proposal is awaiting approval from the cabinet, although the source indicated it is unlikely the cabinet will alter the committee’s decision. The source also mentioned that raising the price beyond 48,000 cedis per ton could push COCOBOD, Ghana’s cocoa marketing board, into a deficit.
Ghana’s new pricing will also need to align with Ivory Coast’s farmgate price for the 2024/25 season, which has yet to be announced. The two leading cocoa-producing nations have coordinated their farmgate prices and cocoa supplies in recent years to stabilize the sector and enhance farmers’ incomes.
Cocoa prices have been strong this year due to disease and adverse weather in Ghana and Ivory Coast, which together account for more than 60% of the world’s cocoa supply. The market is now facing a third consecutive deficit.
On Thursday, the International Cocoa Organisation increased its global cocoa deficit forecast for the 2023/24 season to 462,000 tons, up from 439,000 tons, marking the lowest stocks-to-grindings ratio in 45 years.