Addressing Rising Global Prices and Smuggling Concerns.
Ghana’s Cocoa Marketing Board (Cocobod) has announced plans to increase the fixed farmgate price paid to cocoa farmers by up to 50%. This move aims to share profits from the surging global cocoa prices and deter bean smuggling, which has become a significant challenge for the industry.
The decision comes as cocoa prices have more than tripled over the past year due to disease and adverse weather conditions in Ghana and neighboring Ivory Coast, leading to a third consecutive global market deficit. Despite this price surge, the official farmgate prices in Ghana and Ivory Coast, responsible for over 60% of the world’s cocoa supply, have not reflected these changes until now.
Ghana’s state-guaranteed cocoa price is currently at 20,943 cedi per tonne, with plans to announce the new price soon. This adjustment is a mid-term measure and not indicative of next year’s pricing strategy. However, stakeholders, including licensed cocoa buyers, welcome the increment while acknowledging its potential impact on operational costs.
Challenges such as strong winds, scant rain, smuggling, disease, and the cocoa swollen shoot virus have plagued Ghana’s cocoa production, with output expected to fall significantly below target. Cocobod reports losses from smuggling and illegal activities, further exacerbated by the rising global cocoa prices, highlighting the complexities faced by the industry.