According to two people with knowledge of the pricing review, Ghana will raise the state-guaranteed price it pays its cocoa farmers by almost 45% for the 2024–2025 crop season in an effort to bolster farmers’ earnings and discourage bean smuggling out of the nation.
For the remainder of the 2023–24 season, the second-largest cocoa producer in the world increased the farmgate price by more than 58% in April, to 33,120 cedi ($2,123.08) per metric tonne, or 2,070 cedi per 64 kilogrammes (kg).
After nearby Ivory Coast, the world’s largest producer of cocoa, increased its farmgate price for the April–September mid-crop of the 2023–24 season to 1,500 CFA francs (US$2.55), or around 40 cedis, per kg, from 1,000 CFA francs the previous season, the mid-season price hike occurred.
According to one source, the price for the 2024–25 season, which is expected to start later in September, has been set by Ghana’s cocoa producer price review committee at 48,000 cedi per tonne, or 3,000 cedi each 64 kg of cocoa. This represents an increase of about 45%.
According to the source, the cabinet would be consulted before making a statement on the decision.
The decision has not yet been made public, thus both sources requested to remain anonymous.
The second source stated that it was improbable that the cabinet would reverse the committee’s decision and that raising the price above 48,000 cedis per tonne would force Ghana’s cocoa marketing authority, Cocobod, into a deficit.
According to the source, Ghana’s pricing will also need to match the farmgate price for Ivory Coast in 2024–2025—which has not yet been revealed.
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 market is expected to reach a 45-year low in the stocks-to-grindings ratio, according to the International Cocoa Organisation, which increased its prediction for the global cocoa deficit for the 2023–2024 season (October–September) to 462,000 tonnes from 439,000 tonnes on Thursday.
With a lower output target of 650,000 tonnes, Cocobod had originally intended to open the 2024–25 season on September 1st, earlier than usual. However, according to both sources, the opening will take place later.
The goal of early season opening was to lessen the incentive for bean smuggling, which has been fuelled by poor prices and unpaid 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.
Source: Reuters