Adnan Adams Mohammed
Cocoa farmers in Ghana are to expect quantum leap in farmgate price of their harvest by almost 45 percent for the 2024/25 crop season, sources within government have hinted.
The government believes this will help better compensate the farmers for their labor while curtailing bean smuggling to neighboring countries, news report by Reuters has indicated.
This comes after cocoa price was increased by 58%, translating into GH¢33,120 ($2,123.08) per metric ton, or GH¢2,070 per 64 kilogram (kg), in April in this for the rest of the 2023/24 season.
The mid-season price hike came after top cocoa producer, neighbouring Ivory Coast, raised its farmgate price to 1,500 CFA francs (US$2.55), or around GH¢40 per kg for the April-to-September mid-crop of the 2023/24 season, up from 1,000 CFA francs last season.
According to the Reuters report, one source said Ghana’s cocoa producer price review committee had pegged the price at 48,000 cedi per ton, translating to ¢3,000 per 64 kg of cocoa, for the 2024/25 season due to begin later in September, an increase just shy of 45%.
The source said the decision would be sent to the cabinet pending an announcement.
Both sources asked for anonymity because the decision is not yet public.
The second source said it was unlikely that the cabinet would change the committee’s decision, saying also the price could not be increased beyond ¢48,000 per ton without pushing Cocobod, Ghana’s cocoa marketing board, into a deficit.
Ghana’s price will also have to align with Ivory Coast’s 2024/25 farmgate price, which has yet to be announced, the person added.
The two biggest cocoa-growing countries set up an initiative to coordinate farmgate prices and cocoa supplies to help sustain the sector and boost their farmers’ incomes.
Cocoa prices have been buoyant this year as disease and adverse weather in Ghana and Ivory Coast, which together supply more than 60% of the world’s cocoa, pushed the market to a third successive deficit.
The International Cocoa Organization on Thursday raised its global cocoa deficit forecast for the 2023/24 season (October-September) to 462,000 tons from 439,000 tons, saying the market was headed for a 45-year low stocks-to-grindings ratio.
Cocobod previously planned to launch the 2024/25 season on Sept. 1, earlier than usual, with a reduced production target of 650,000 tons, but both sources said the opening will be later.
Opening the season earlier was aimed at helping reduce bean smuggling, which has been incentivised by low prices and delayed payments to farmers.
Some of Ghana’s cocoa farmers and licensed buyers accused both sides of hoarding beans to benefit from the proposed price hike in the new season.
