Ghana raises cocoa price by 45 percent to deter smuggling

ACCRA

Ghana's government has announced a 45-percent increase in the producer price of cocoa for the 2024/2025 crop season, in a bid to curb smuggling.

The policy is also designed to improve the welfare of cocoa farmers as the new season begins, said Agriculture Minister Bryan Acheampong.

The new price, effective from Sept. 11, raises the payment for a 64-kilogram bag of cocoa beans to $192, up from $132.

That brings the farm gate price to $3,063 per ton, a 129-percent increase from the opening price of $1,335 per ton for the 2023/2024 season.

The price rise follows a mid-season adjustment last year when the government raised prices from $1,335 per ton to $2,113 per ton in response to soaring international cocoa prices.

New York cocoa futures have recently surged above $7,000 per ton due to poor harvests in Ghana and Ivory Coast, the world's top producers.

Farmers in these countries however often receive much lower prices, set by their governments.

Experts suggest that increasing the farm gate price could lower the incentive for illegal cross-border sales, allowing farmers to reinvest in their cocoa farms, thus potentially easing the global supply shortfall.

Ghana's cocoa harvest has declined in recent years due to weather challenges, disease, inadequate inputs, and smuggling.

Its cocoa sector, which accounts for about 10 percent of the nation's GDP, relies heavily on smallholder farmers.

Production costs have also soared, with fertilizers and other essential materials becoming increasingly expensive, while poor road networks have pushed up transport costs.