Ivory Coast has increased the price it offers cocoa farmers, surpassing what Ghana pays, despite growers in both nations still receiving significantly less than global market rates.
As of October 1, the top cocoa producer in the world has raised the farmgate price by 20% to 1,800 CFA francs ($3.06) per kilogram, as announced by Minister of Agriculture Kobenan Kouassi Adjoumani in Abidjan.
This price translates to $3,060 per ton, slightly higher than Ghana’s initial payment of $3,039 per ton for the start of its harvest season this month.
This move could deter the smuggling of Ivorian cocoa beans to Ghana, though the risk of illegal exports to neighboring countries like Liberia and Guinea remains due to buyers there offering prices closer to the global market rate.
A combination of adverse weather, diseases, and insufficient agricultural inputs limited cocoa production across West Africa last season, causing cocoa futures to reach an all-time high earlier this year, exceeding $11,000 per ton. Since then, futures have declined, trading around $7,700 per ton as of Monday in New York.
The poor harvest has led to a global cocoa market deficit for the third consecutive year. While production is expected to rebound in the upcoming season, the surplus is projected to be modest, estimated at around 90,000 tons, according to a survey of 15 analysts and traders by Bloomberg.
The pricing systems established by the governments of Ivory Coast and Ghana have hindered farmers from fully benefiting from the global price surge.
This situation has limited sufficient investment in farms and encouraged smuggling to neighboring countries, where the market is less regulated and prices are considerably higher.
According to Bloomberg’s report on September 19, Ivory Coast is estimated to have lost between 150,000 and 200,000 tons of cocoa beans to smuggling during the current crop year ending Monday.
As part of a “strategic cooperation,” Ivory Coast from 2024-25 will begin to harmonize output control, pricing and marketing system with Ghana, Adjoumani said. The farmgate price of coffee was increased by 67% to 1,500 CFA francs per kilogram, he said.