Cocoa Prices Surge: In the 2023/24 season, cocoa in Ghana is set to be sold for ¢1,308 per bag, marking a significant increase from previous prices. This move is aimed at boosting the income of cocoa farmers and curbing the smuggling of cocoa beans to neighboring countries where they command higher prices due to tightening supplies.

President Nana Akufo-Addo announced that for the upcoming season starting in September, farmers will receive 20,943 Ghana cedi ($1,837) per tonne, a substantial rise from the 12,800 Ghana cedi they received in the previous year. During the launch ceremony of the new cocoa season in the Tepa cocoa-growing district, Akufo-Addo proudly stated that this new price represents the highest payout to farmers in West Africa in over half a century.

This increase comes in response to soaring cocoa futures prices, which have reached levels not seen in 46 years. Concerns about tight cocoa supplies in the region, where approximately 70% of chocolate’s key ingredient is sourced, have driven up prices. In fact, December London cocoa settled at 3,050 pounds per metric ton, a 73-pound increase and a 2.5% rise, reaching levels last witnessed in 1977.

The cocoa market has been consistently reaching new highs since late June, as issues like black pod disease in West Africa contribute to a substantial global deficit in the current 2022/23 season (October/September).

President Akufo-Addo reassured the farming community that with the predicted stable prices, the government remains committed to offering competitive prices to farmers in the years to come, ensuring their prosperity.

Previously, the weakened cedi currency and lower farmgate cocoa prices in Ghana for the 2022/23 season compared to neighboring Ivory Coast, the world’s largest cocoa producer, led to cocoa smuggling to these countries, resulting in lower-than-expected cocoa output in Ghana. This situation prompted the government to close the season a month earlier than planned and commence the new season in September instead of October.

However, with the significant price increase, Leticia Adu Yankey of Ghana Civil Society Cocoa Platform noted that the price gap has now been closed, making it no longer profitable to sell cocoa to Ivory Coast and Togo.

Fiifi Boafo, head of public affairs at COCOBOD regulator, revealed that Ghana aims to achieve an output of 820,000 metric tons for the 2023/2024 season following the farmgate price hike. He also acknowledged that Ghana suffered losses of around 150,000 metric tons of beans in the current season due to smuggling and artisanal gold mining, known as “galamsey,” which has been destructive to cocoa farms. Boafo further disclosed that Ghana plans to borrow $1.2 billion for its annual cocoa purchases, with $800 million sourced from a consortium of banks and $400 million from other channels.

Additionally, Cameroon, another prominent West African cocoa producer and the fourth-largest globally, recently raised its farmgate cocoa price by 25% to approximately 1,500 CFA franc per kg for the 2023/2024 season. This move aligns with the region’s efforts to support its cocoa farmers.

($1 = 11.4000 Ghanaian cedi) ($1 = 0.8023 pounds) ($1 = 612.5300 Central African CFA franc BEAC)