Authorities in Ghana, the world’s second largest cocoa producer, announced on Wednesday 11 September a 45% increase in the price of beans for the 2024-2025 season, in particular to combat smuggling in a context of high prices. With this new tariff, the price paid to producers in Ghana for a 64 kg bag of cocoa beans rises from 132 to 192 dollars, an increase of 45%.
In one year, the price of cocoa paid for production has experienced “an unprecedented increase of 129.36%”Agriculture Minister Bryan Acheampong stressed. In April, Ghana had already increased the purchase price of cocoa from producers by 58%. This figure now stands at around $3,000 per tonne, compared to $1,335 at the start of the 2023-2024 season.
World cocoa prices have been high for several months. The price of a tonne of cocoa in New York recently exceeded $7,000 due to poor harvests in Ghana and Ivory Coast, the world’s main producers.
In Ghana, the cocoa sector is highly regulated and farmers are obliged to sell their production to the Ghana Cocoa Board (Cocobod), a public body that sets prices. However, some producers prefer to export their beans in contraband to benefit from more attractive prices.
Around 10% of the country’s GDP.
The National Bank of Ghana estimated that the country suffered a deficit of $500 billion in the first quarter alone, due in particular to this phenomenon. Experts say that the increase in the producer price of cocoa could encourage Ghanaian farmers to invest in their farms, which could alleviate the global supply shortage.
The cocoa sector accounts for about 10% of Ghana’s GDP and relies heavily on smallholder farmers. It supports one million of the West African country’s 33 million inhabitants. Ghana’s cocoa harvest has also declined in recent years due to climate problems.
Production costs have also skyrocketed, with fertilizers and other materials needed for farming becoming more expensive. The poor state of road networks has also inflated transport costs, squeezing farmers’ margins.
According to Cocobod, 500,000 hectares of cocoa crops have been lost in recent years, or about 29% of the country’s total land previously devoted to cocoa. In June, a Cocobod official said he expected domestic production to rise to 800,000 tonnes by 2024.
