Global cocoa prices have slipped below the producer price Ghana is currently paying its farmers, introducing a new shift in the cocoa market that industry watchers are closely monitoring.
This places a lot of stress on the already struggling COCOBOD, which in most cases must absorb the difference between domestic and global prices.
Cocoa is now trading on the world market at around $5,100 per tonne, translating to roughly GH¢54,570 at prevailing exchange rates. This is below the GH¢58,000 per tonne paid to farmers under Ghana’s producer price for the current season.
When the government announced the producer price increase in October, world cocoa prices were significantly higher, trading in the range of $6,000 to $7,000 per tonne, reflecting severe supply pressures across West Africa. The higher international prices at the time provided room for Ghana to raise farmgate prices while remaining broadly aligned with global market conditions.
Since then, global prices have eased as market expectations adjusted, even as Ghana’s producer price has remained fixed for the season.
With global prices falling, authorities are yet to indicate whether what farmers receive will be revised down or if the producer price will remain unchanged for the rest of the season.
If global prices remain below domestic prices for a prolonged period, the gap could increase financial pressure within the cocoa sector, particularly on COCOBOD, which absorbs the difference.
