Ghana’s government on Wednesday announced a significant 45-percent hike in the producer price of cocoa for the upcoming 2024/2025 crop season.
This bold move aims to reduce rampant cocoa smuggling and enhance the living conditions of cocoa farmers, according to Agriculture Minister Bryan Acheampong, who made the announcement.
Starting immediately, the price per 64-kilogram bag of cocoa beans will jump to $192, up from $132. This adjustment translates to a farm gate price of $3,063 per tonne, marking a 129-percent rise from the opening price of $1,335 per tonne in the previous 2023/2024 season.
Minister Acheampong underscored the magnitude of this change, stating, “This is an unprecedented increase of 129.36 per cent.”
He emphasized that this leap reflects the government’s dedication to uplifting the sector and the livelihoods of cocoa farmers, adding that “this appreciable increment in the producer price of cocoa signifies the government’s commitment to improving the sector and the livelihoods of the Ghanaian cocoa farmer.”
This surge in pricing follows a similar mid-season adjustment in 2023, where the government raised prices from $1,335 per tonne to $2,113 per tonne, largely in response to the skyrocketing global cocoa prices.
In recent months, cocoa futures in New York have surged beyond $7,000 per tonne due to poor harvests in both Ghana and Ivory Coast, the world’s leading cocoa producers.
Despite these soaring international prices, local farmers often earn significantly less due to government-controlled pricing mechanisms.
Analysts suggest that increasing the farm gate price could help reduce incentives for illegal cross-border sales, particularly to neighbouring countries, and enable farmers to reinvest in their operations.
This, in turn, could help alleviate the ongoing global cocoa supply shortfall, which has been exacerbated by declining production in recent years.
Ghana’s cocoa industry, contributing around 10 per cent to the country’s GDP, has faced numerous challenges, including unfavourable weather conditions, disease outbreaks, and a lack of necessary inputs. Cocoa smuggling has only worsened the situation.
The depreciation of the cedi, which has plummeted by more than 20 per cent against the dollar in 2024, has further eroded the profitability for farmers, even though international cocoa prices surged to as high as $10,000 per tonne in March before settling back.
In addition, rising production costs have placed an additional burden on farmers, with the prices of fertilizers and essential farming inputs continuing to soar.
Poor infrastructure has also led to higher transportation costs, particularly for farmers in remote areas. Compounding these challenges, the Cocoa Swollen Shoot Virus Disease has devastated nearly 500,000 hectares of cocoa farms in recent years, wiping out around 29 per cent of Ghana’s cocoa production area.
Despite these setbacks, the government’s latest policy adjustment is seen as a positive step toward addressing the sector’s issues and giving cocoa farmers the much-needed support to continue cultivating one of the nation’s most vital exports.
