1 ton of cocoa to possibly sell for GHS 20,800 as Gov’t readies to announce new farmgate price on Sept. 9
Ghana’s cocoa industry regulator has proposed a significant increase in the farm-gate price for cocoa farmers in an effort to deter smuggling of beans to neighbouring Ivory Coast, where cocoa returns are more lucrative.
The suggested new farm-gate price is 20,800 cedis ($1,825) per ton for the upcoming season, marking a substantial increase from the current season’s rate of 12,800 cedis. However, this increase is still pending governmental approval.
The objective behind this proposed price hike is to align Ghana’s cocoa rates with those in Ivory Coast, which is expected to raise its farmers’ rates from the current $1,334 per ton.
Ghana, the world’s second-largest cocoa producer, has experienced a decline in cocoa output, partially due to unofficial sales to Ivory Coast, where a stronger currency is more appealing to farmers.
This development in local cocoa prices is occurring amidst tightening global cocoa supplies, leading to a 12-year high in New York cocoa futures.
The cocoa market is facing a third consecutive year of deficits due to adverse weather affecting West African cocoa-producing regions, and the potential return of El Niño could further disrupt production.
The official announcement of the new cocoa farm-gate price is scheduled to be made by President Nana Akufo-Addo on September 9, 2023.
Meanwhile, Ghana’s Cocoa Board is facing challenges in securing funds to purchase cocoa beans for the upcoming harvest, partly due to the recent International Monetary Fund bailout, which involved debt restructuring related to cocoa purchases. The regulator is exploring alternative financing options from international banks to address this issue.
