Ghana has announced it will pay a farmgate price of GHS20,928 (USD1821) per tonne and GHS1308 per 64kg bag of cocoa beans for the 2023/24 crop season, which officially opened Friday, 8 September 2023.
This historic 63.5% price hike over the just-ended season’s GHS800 per bag is the direct result of a review of the government’s policy on determining the cocoa producer price.
The announcement comes one month earlier than the annual Cocoa Day event on October 1.
The world’s second-largest cocoa producer hopes the improved price will help tackle the twin problems of smuggling and illegal gold mining on cocoa farmlands, and also “safeguard the interest of cocoa farmers.”
The challenges exacerbated by disease and climate change are attributed to “recent disruptions in the internal marketing of cocoa,” according to the regulator, Ghana Cocoa Board (Cocobod).
It emerged in mid-August that Ghana could not fulfil some of its cocoa contracts due to factors including poor harvest attributed to extreme weather.
The development prevented Cocobod from fulfilling some current cocoa contracts and forced it to postpone the supply of some 44,000 metric tons of cocoa beans to future harvests.
Cocobod is expected to lower its 2022/23 total output by around 11% less than a targeted 750,000 tonnes on the back of the situation, Reuters said on Friday.
This appears as a replay from last season, where a double whammy of drought and illegal gold mining forced Cocobod to revise its 850,000MT target for the year to 650,000MT, with an estimated loss of $350 million in revenue projections.
It was confirmed in 2022 that more than 19,000 hectares of vibrant cocoa farms had been destroyed by illegal gold mining (galamsey) activities, a figure watchers fear may have doubled in the face of no potent action to halt the menace.
Combined with Ghana’s troubles, a crop shortfall in neighbouring Cote d’Ivoire, the world’s number one cocoa producer, has occasioned a global supply deficit driving up prices to record levels.
Speaking at an industry durbar marking the opening of the new crop season at the Agyeman Prempeh Stadium at Tepa in the Ashanti Region, President Nana Akufo-Addo, stated that “it is the highest price to be paid to cocoa farmers across West Africa in over 50 years.”
Unlike previous seasons, this year’s farmgate price reflected a new pricing policy with the formula based on gross FOB instead of net FOB price and hoped to deliver more value to cocoa farmers.
With the demons of Ghana’s just-ended crop season partly linked to cross-border smuggling due to price differentials, it remains to be seen how the new price will deliver to expectations as Cote d’Ivoire is yet to announce its farmgate price.
Ahead of the announcement, cocoa farmers and allied civil society group, the Ghana Civil-society Cocoa Platform (GCCP), waged an animated advocacy campaign demanding a minimum farmgate price of GHS1380 per bag of cocoa.
They hoped the amount would help cushion Ghana’s over 800,000 cocoa farming families against the high cost of production and a worsening cost of living crisis.