Ghana Increases Cocoa Producer Prices for the 2022/2023 Crop Season
The Minister for Food and Agriculture on Wednesday 5, October 2022 announced a 21% increase in cocoa prices for the 2022/23 crop season. The current price per 64kg bag of cocoa, which stands at GH¢660 will now be sold at GH¢800, effective Friday 7, October 2022. The increase also signifies that the Ghana Cocoa Board (COCOBOD) will buy a metric tonne at GH¢12,800 representing 89.99% of the net FOB value. The announcement comes after consistent agitation from cocoa farmers over current cost of inputs and threats to smuggle their products to Ivory coast for competitive offers. Ivory coast took the lead earlier on September 30, 2022 to announce a raise in their price from 825CFA to 900CFA, equivalent to $1.33 per Kilogram.
The increase in prices follows COCOBOD securing a syndicated loan of $1.13 billion for the 2022/2023 crop season and recommendations from some stakeholders in the industry. The Ghana Civil-Society Cocoa Platform, for example, had proposed that producer price should be increased to a minimum GH¢838 per 64kg bag.
At a press briefing in Accra, the Minister, Dr. Owusu Afriyie Akoto stated; “The 21% rise in the producer price of cocoa is a testament to Government’s resolve to ensure farmers earn a decent income and make cocoa farming lucrative. Government will continue to implement initiatives to build a robust, resilient and sustainable cocoa industry where cocoa farmers and their communities will thrive”.
Reacting to the announcement of the new cocoa price, Nana Obeng Akrofi, a representative of cocoa farmers at COCOBOD expressed some level of contentment about the new producer price: “…according to the world price, I think it is okay. We were expecting about GH¢1,000 but according to the world price, I think GH¢800 is good for us…I will organize my farmers and explain a few critical points to them. They will understand”. Ghana’s farm gate price was last raised in 2020, from GH¢515 to GH¢660, which was a historic 28% raise that followed the $400 Living Income Differential on every tonne of cocoa.
Meanwhile the increase in price have also met some reactions from the minority caucus in parliament, who had previously called for the farm gate price to be increased to GH¢1000 per bag. According to the Ranking Member on the Finance Committee, Dr. Cassiel Ato Forson, the new producer prices are too small as compared to the prices being offered in Ivory Coast considering the high rate of depreciation of the Ghanaian currency. Arguing his point via a local news channel, Citi Fm, he said; “We know in times like this, persons who should benefit most is the one whose currency has depreciated the most. Ghana’s currency has depreciated more than that of the Ivory Coast.”
On the other hand, it is anticipated that this year’s crop season would be negatively affected by the current economic crisis in Ghana as well as fertilizer shortages due to the conflict between Russia and Ukraine. COCOBOD has noted that, the country could lose a sum of $350 million in revenue projections for the crop year following setbacks of drought and “galamsey” (activities of illegal gold miners) which has forced the board to revise its 850,000 metric tonnes production target to 650,000 metric tonnes for the year.
The projection by COCOBOD may also signify a worry for buyers and consumers on the international market as the commodity experiences a shortfall in production. Already, global supply is on a decline as reported by the International Cocoa organization (ICCO) of a 230,000 tonnes deficit for the 2021/2022 crop season largely driven by the steep decline in Ghana’s cocoa production mainly due to unfavorable weather conditions in the West African sub-region and the outbreak of swollen shoot disease.