Ghana has increased the cocoa farmgate or producer price for the prevailing 2023/24 season by 58.26%, from GH¢20,928 per tonne to GH¢33,120.00 per tonne for the rest of the 2023/24 cocoa season.
This figure translates into GH¢2,070 per bag of 64 kg gross weight from GH¢1308.99 and takes effect from Friday, April 5, 2024.
The Ghanaian government said it reviewed the cocoa farmgate price in consultation with stakeholders.
The new producer price of cocoa shall be applied at all cocoa sheds for the rest of the 2023/24 crop year, which ends in September.
“The increase in the producer price of cocoa has become necessary to enhance the income of cocoa farmers in line with the vision of the NPP government and in response to the rising prices of cocoa on the international market,” a press release by Ghana Cocoa Board (Cocobod) said.
It also cited “the welfare of cocoa farmers” as a reason for the raise in farmgate price which has seen a cumulative increase of up to 336% since 2017, from GH¢7,600 to GH¢33,120 per tonne.
Meanwhile, the buyers’ margin for licenced buying companies (LBCs) for the rest of the 2023/24 cocoa season has also been pegged at GH¢2,980.00 per tonne.
“This increase is expected to cushion the LBCs against the increase in finance cost due to an increase in the producer price of cocoa,” Cocobod stated.
Reacting to the Ghana cocoa farmgate price increase, a top executive of a leading LBC, speaking on condition of anonymity, called the government’s move “a good strategy to avert the smuggling, safeguard our stocks, and give the farmers a decent revenue.”
“For LBCs, it puts more stress on us to look for more funding at extra cost. And given the collateral requirements, it’s really a big challenge for LBCs. But overall, it’s the right thing to do now,” the source said.
Ghana, the world’s number two producer, has been faced with a myriad of challenges in the past few years, negatively impacting production.
The country is projected to miss its annual production target by as much as 40% for the 2023/24 season due to disease, drought, and cross-border smuggling.
Cocoa sector regulator, Cocobod, said it has lost about 150,000 metric tonnes of cocoa beans to smuggling and illegal gold mining known locally as galamsey in the 2022/23 season.
With world market prices of cocoa soaring to unprecedented highs and crossing the $10,000 mark for the first time last Tuesday, a farmgate price increase is viewed by many as a natural consequence.
Ghana’s action follows in tow to a similar move by neighbouring Ivory Coast early this week, which hiked its cocoa farmgate price by 50% from 1000 FCA francs to 1500 CFA francs.
Both countries are suffering record declines in cocoa production, stoking a global cocoa beans supply crisis.
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