Côte d'Ivoire raises cocoa price above Ghana

GraphicOnline Business News Oct - 01 - 2024 , 17:58

Ivory Coast [Côte d'Ivoire], the world’s leading cocoa producer, has increased the price it pays farmers for cocoa, surpassing Ghana, even though growers in both nations continue to receive significantly less than global market prices.

The Ivorian government has raised the farmgate price by 20 percent to 1,800 CFA francs ($3.06) per kilogram for the harvest beginning on 1 October, Agriculture Minister Kobenan Kouassi Adjoumani announced in Abidjan.

This new rate, which equates to $3,060 per tonne, slightly exceeds the $3,039 per tonne that Ghana has been paying its farmers since the start of the cocoa season this month.

This price hike could help deter the smuggling of Ivorian cocoa to Ghana, the world’s second-largest producer, though it may not completely resolve the issue of illegal exports to neighbouring countries like Liberia and Guinea, where buyers offer rates closer to global market prices.

Last season, a combination of poor weather, disease, and insufficient farming inputs reduced cocoa output across West Africa, causing cocoa futures to soar to record highs, peaking at over $11,000 per tonne earlier this year. However, futures have since declined, trading at around $7,700 per tonne in New York on Monday.

Despite this global price surge, the pricing system imposed by the Ivorian and Ghanaian governments has limited farmers’ ability to fully benefit from the market rally.

This has discouraged investment in cocoa farms and fuelled smuggling to neighbouring countries, where markets are less regulated and prices are higher. Côte d'Ivoire reportedly lost an estimated 150,000 to 200,000 tonnes of cocoa to smuggling during the crop year ending on Monday, according to a Bloomberg report on 19 September.

In a bid to address these challenges, Côte d'Ivoire will begin harmonizing its output control, pricing, and marketing system with Ghana from the 2024-25 season, as part of a "strategic cooperation" between the two countries, Adjoumani revealed.