Ivory Coast, the world’s largest cocoa producer, has increased the price it pays farmers for cocoa, surpassing neighbouring Ghana. The government raised the farmgate price by 20% to 1,800 CFA francs (GH¢48.11) per kilogram for the harvest starting October 1, according to Agriculture Minister Kobenan Kouassi Adjoumani. This translates to GH¢48,110 per ton, slightly above Ghana’s rate of GH¢48,000 per ton, which was set earlier in September.
This price hike aims to curb the smuggling of Ivorian cocoa beans into Ghana, where farmers might seek better deals. However, smuggling to neighbouring countries such as Liberia and Guinea may continue, as buyers there offer prices closer to the global market rate.
Despite the increase, cocoa farmers in both Ivory Coast and Ghana continue to receive significantly less than the global market price. Cocoa futures recently reached an all-time high of $11,000 (GH¢173,030) per ton but have since dropped to around $7,700 (GH¢121,121) per ton in New York.
Poor weather conditions, disease, and a lack of farming inputs contributed to a reduced harvest across West Africa last season, leading to a third consecutive global cocoa market deficit. While a recovery is expected in the upcoming season, analysts predict a small surplus of around 90,000 tons.
The price-setting systems in Ivory Coast and Ghana have limited farmers’ ability to benefit from global price rallies, discouraging investment in farms and fueling smuggling to less regulated markets offering higher prices. Ivory Coast reportedly lost between 150,000 and 200,000 tons of cocoa to smuggling during the 2023-24 crop year, according to a Bloomberg report.
Looking ahead, Ivory Coast and Ghana plan to harmonize their cocoa output control, pricing, and marketing systems as part of a new strategic cooperation beginning in the 2024-25 season. Additionally, Ivory Coast has raised the farmgate price for coffee by 67%, setting it at 1,500 CFA francs (GH¢40.09)per kilogram.
