Ghana Increases Cocoa Price by 45%

The Ghanaian government has announced a 45% increase in the producer price of cocoa for the 2024/2025 crop season in an effort to combat smuggling and improve the livelihoods of cocoa farmers. The price hike, which was revealed by Agriculture Minister Bryan Acheampong, aims to support smallholder farmers who have faced significant challenges in recent years, including rising production costs, poor weather conditions, and disease outbreaks.

Under the new pricing structure, farmers will receive $192 for a 64-kilogram bag of cocoa beans, up from $132. This brings the farm gate price to $3,063 per tonne, a notable 129% increase from the $1,335 per tonne price set at the start of the 2023/2024 season. Minister Acheampong emphasized that the increase demonstrates the government’s commitment to revitalize the cocoa sector and improve the economic conditions of farmers.

The price adjustment follows a mid-season increase last year, driven by a surge in global cocoa prices due to supply challenges in Ghana and Ivory Coast, the world’s largest producers of cocoa. International cocoa prices have recently climbed above $7,000 per tonne, but farmers in these countries often receive lower rates, as prices are regulated by their respective governments.

Experts suggest that raising the farm gate price could discourage illegal smuggling to neighboring countries, where farmers can sell their beans at higher prices. Smuggling has contributed to Ghana’s declining cocoa output, alongside other factors such as weather challenges, crop diseases, and the devastating Cocoa Swollen Shoot Virus Disease (CSSVD), which has impacted nearly 500,000 hectares of cocoa farms.

The cocoa industry, which contributes around 10% to Ghana’s GDP, remains vital to the country’s economy. However, cocoa export revenues have plummeted by nearly $700 million in the first half of 2024, largely due to smuggling and illegal mining activities. Despite the price increase, Ghana’s cocoa sector still faces significant hurdles, and long-term solutions are needed to restore production levels and stabilize the economy.

With these new policies in place, Ghana aims to protect its cocoa industry, ensure fairer prices for farmers, and reduce the economic pressure created by smuggling and other illegal activities. However, further support and investment in infrastructure, crop disease management, and market stability will be essential for the sector’s sustainability.