The New Patriotic Party (NPP) has stated that the significant increase in the producer price of cocoa for the upcoming 2023/2024 cocoa season will provide farmers with a stable and secure source of income.
The party highlighted that the 63.5% raise in the farm-gate price represents the highest increase in 50 years among the West African sub-regional cocoa-producing nations. The NPP encouraged farmers to disregard critics who attempt to diminish the importance of this substantial increase.
During a press conference held in Accra, Mr. Richard Ahiagbah, the Director of Communications for the NPP, asserted that this price hike would serve as a motivator for cocoa farmers to increase their cultivation efforts and could also entice new entrants into the industry.
He further emphasized that an increase in cocoa production would generate employment opportunities across the entire value chain and contribute to the long-term sustainability of the cocoa sector.
“Cocoa farmers will receive a higher price for their cocoa beans, increasing their income. Farmers can use the extra income to improve their living standards, invest in their farms, and meet other financial needs.
“It reduces their vulnerability to economic shocks, leading to a more stable and secure livelihood,” he said.
On Saturday, September 9, President Nana Addo Dankwa Akufo-Addo announced a revised cocoa price during the launch of the 2023/2024 cocoa season at an event in Tepa, located in the Ashanti Region.
The new cocoa price has been increased from GHC 12,800.00 per tonne to GHC 20,943.00 per tonne, representing a substantial 63.5% increase. This new price marks the highest in the sub-region over the past 15 years and aims to enhance the living standards of cocoa farmers by providing them with a fair compensation for their efforts.
Mr. Ahiagbah refuted allegations made by the National Democratic Congress (NDC) that the government had unfairly compensated farmers with a “meager fraction” of what it could earn on the international market. He clarified that the calculations for the new price were based on the achieved Free-On-Board (FoB) Price of $2,600 per tonne from the forward sales of cocoa, using an exchange rate of GH₵11.50 to a dollar.
Furthermore, he explained that the country had engaged in forward sales of substantial cocoa volumes to secure a syndicated loan for farmer payments.
As a result, the determination of the Producer Price considered the achieved FoB Price obtained over several months of sales. Since prices in the forward sales market differed significantly from spot sale prices, the most recent FoB Price of $2,600 per tonne served as the foundation for calculating the new Producer Prices.