Ivory Coast Raises Cocoa Farmgate Price to $3,060 per Ton, Surpassing Ghana’s Rate of $3,039
Ivory Coast, the world’s largest cocoa producer, has increased the price it pays farmers for cocoa by 20% to 1,800 CFA francs ($3.06) per kilogram for the new season starting October 1, 2024.
This brings the rate to $3,060 per ton, surpassing Ghana’s farmgate price of $3,039 per ton, which was set at the start of its season earlier this month. The price hike comes as both countries continue to pay farmers significantly less than the global market rate.
The move is seen as an attempt to curb the smuggling of Ivorian cocoa beans to Ghana, the second-largest cocoa producer, and neighboring countries such as Liberia and Guinea, where buyers offer prices closer to global market levels.
Despite this increase, illegal exports to these countries are expected to persist, as prices outside the regulated markets remain higher.
Cocoa futures reached an all-time high earlier this year, exceeding $11,000 per ton due to a poor harvest driven by unfavorable weather conditions, disease, and a lack of farm inputs across West Africa.
While futures have since dropped, trading at around $7,700 per ton in New York on Monday, the global cocoa market remains in deficit for the third consecutive year as analysts expect a small surplus of about 90,000 tons in the upcoming season, based on a Bloomberg survey.
However, the pricing systems in both Ivory Coast and Ghana prevent farmers from fully capitalizing on the global cocoa price surge. This has led to underinvestment in farms and widespread smuggling to less regulated markets with higher prices.
Ivory Coast alone is estimated to have lost between 150,000 to 200,000 tons of cocoa beans to smuggling in the current crop year, which ends this week, according to a Bloomberg report.
In a bid to strengthen cooperation, Ivory Coast announced plans to harmonize its cocoa output control, pricing, and marketing systems with Ghana starting in the 2024-25 season.
The Ivorian government also raised the farmgate price of coffee by 67% to 1,500 CFA francs per kilogram.
