Ghana and Côte d’Ivoire have agreed to harmonise cocoa farm-gate pricing policies in a move aimed at strengthening farmer incomes, reducing market distortions and reinforcing the cocoa sector’s resilience against growing market volatility and climate-related risks.
The initiative, announced during a high-level summit in Abidjan, builds on ongoing cooperation between the world’s two largest cocoa producers – including the Living Income Differential (LID), a US$400-per-tonne premium introduced in October 2020 to improve farmer earnings and secure a greater share of value from the global cocoa trade.
Policymakers believe closer alignment of pricing policies could strengthen the bargaining power of both countries while supporting efforts to stabilise the sector amid mounting production and market challenges.
Speaking at the 7th Steering Committee Meeting of the Côte d’Ivoire-Ghana Cocoa Initiative (CIGCI), Finance Minister Dr Cassiel Ato Forson said long-term sustainability of the cocoa sector depends on deeper cooperation between Ghana and Côte d’Ivoire – which together account for more than 60 percent of global cocoa production.
He said the industry must be transformed into one that is more resilient, prosperous and profitable, delivering greater benefits to farmers while protecting the economic interests of both countries.
According to Dr Forson, Ghana and Côte d’Ivoire face common challenges including climate risks, production constraints and uncertainty in international commodity markets, making coordinated action increasingly necessary.
“As the world’s two leading cocoa-producing countries, we must engage more consistently and strategically to protect our economies. By doing so, we can better anticipate challenges, mitigate shocks and shape the industry’s future rather than merely reacting to its disruptions,” he said.
The LID remains central to those efforts. Since its introduction, Ghana and Côte d’Ivoire have worked to enforce compliance across the cocoa value chain, including warning chocolate manufacturers and traders against attempts to circumvent the premium and threatening to suspend sustainability programmes linked to companies that fail to honour agreed pricing arrangements.
The initiative however continues to face significant headwinds. Market practices such as application of negative country differentials by some traders have eroded a substantial portion of the premium’s value, while climate change, cocoa diseases and declining production volumes have increased pressure on the sector.
These challenges have reinforced calls for closer cooperation between the two countries to safeguard gains achieved under the LID framework and strengthen their collective bargaining power in the global cocoa market.
Major cocoa traders have continued to apply negative country differentials estimated at about US$260 per tonne, reducing a substantial portion of the intended premium. Industry assessments indicate that these market adjustments have eroded as much as 65 percent of the LID’s value, limiting its effectiveness in delivering higher incomes to farmers.
Production challenges have further increased pressure on the sector. Climate change continues to affect growing conditions across West Africa, while cocoa diseases – particularly Swollen Shoot Virus – are estimated to affect between 30 percent and 50 percent of cocoa farms in some producing areas. At the same time, declining production volumes in both countries have constrained export revenues and complicated market management efforts.
Available assessments also suggest that farmers receive only about 60 percent of benefits generated through the LID mechanism, highlighting ongoing concerns about value distribution throughout the supply chain.
Against that backdrop, policymakers increasingly view stronger Ghana-Côte d’Ivoire coordination as essential to preserving the gains achieved through the initiative and strengthening bargaining position of cocoa-producing countries.
The call for greater cooperation was reinforced by COCOBOD Chief Executive Dr. Randy Abbey, who urged both countries to deepen trust, transparency and policy alignment to maximise their influence in international cocoa markets.
Addressing stakeholders at the meeting, Dr. Abbey said the success of future interventions will depend on maintaining a common strategic direction, particularly on cocoa pricing and market engagement.
“Ghana and Côte d’Ivoire have a unique opportunity to shape the global cocoa industry’s future. However, this can only be achieved if we continue to work together in a spirit of openness, honesty and trust,” he said.
According to him, fragmented approaches to pricing and market engagement risk weakening efforts to secure fair value for cocoa producers, while coordinated action could significantly enhance the bargaining power of both countries.
“With one accord, the two countries can achieve a lot in terms of price on the international market,” Dr. Abbey added.
Beyond pricing, he highlighted the need for continued collaboration on sustainability, traceability, climate resilience and farmer welfare as global regulatory requirements become increasingly stringent.
The push for closer coordination received further backing at the Côte d’Ivoire-Ghana High-Level Summit on the Future of the Cocoa Economy held in Abidjan, where President John Dramani Mahama and President Alassane Ouattara committed to harmonising cocoa farm-gate pricing policies across the two countries.
In a joint declaration issued after the summit, both leaders said the initiative is intended to improve farmer remuneration, reduce market distortions and strengthen commercial cooperation between the world’s two largest cocoa-producing nations. The agreement envisages greater alignment of pricing premiums, crop-season calendars and market policies as both countries seek to reinforce their influence within the global cocoa value chain.
Ghana and Ivory Coast have significantly reduced their cocoa farm-gate prices for the 2025/2026 season due to falling global markets. Ghana’s price is now GH¢41,392 per tonne (US$3,580), while Ivory Coast cut theirs to 1,200 FCFA/kg (approximately US$2,140/tonne), representing 28.6 percent and 57 percent decreases respectively to align with international prices.
The leaders noted that Ghana and Côte d’Ivoire collectively account for about 60 percent of global cocoa production and therefore share responsibility for shaping the industry’s future.
They also reaffirmed their commitment to the Living Income Differential, citing it as one of the major achievements of the Côte d’Ivoire-Ghana Cocoa Initiative alongside cooperation on traceability systems and sustainable cocoa standards.
The declaration identified continuing challenges including price volatility, climate change, illegal gold mining, cocoa diseases and increasingly stringent sustainability requirements in export markets.
Both countries also pledged to deepen scientific cooperation in combatting Cocoa Swollen Shoot Virus Disease, expand local cocoa processing and value addition and promote greater regional consumption of cocoa products.
As part of efforts to strengthen collective bargaining power, Ghana and Côte d’Ivoire further agreed to pursue expanding the Côte d’Ivoire-Ghana Cocoa Initiative to other African cocoa-producing countries, with the objective of promoting policy harmonisation and greater coordination across the continent’s cocoa sector.
The renewed emphasis on strategic cooperation comes as Ghana’s cocoa sector simultaneously pursues major financing reforms aimed at strengthening operational sustainability.
COCOBOD is preparing to launch a tranche-based commercial paper programme ahead of the 2026/2027 cocoa season to reduce borrowing costs, attract greater domestic participation in cocoa financing and lessen dependence on offshore syndicated loans.
The proposed structure will allow the cocoa regulator to raise funds incrementally rather than borrowing an entire season’s financing requirement upfront. Officials believe this approach will improve liquidity management and lower financing costs by ensuring funds are drawn only when needed for cocoa purchases.
COCOBOD indicates that the financing framework has reached an advanced stage, with advisors working to finalise the structure and satisfy regulatory requirements.
The programme is expected to mobilise working capital from pension funds, commercial banks, international cocoa buyers and other participants in the cocoa value chain.
The financing reforms come at a time when COCOBOD faces significant financial obligations. The institution is estimated to carry liabilities of approximately GH¢32billion, with about GH¢11.9billion due for repayment in 2025. Licenced Buying Companies also reportedly owe roughly GH¢10.1billion.
Meanwhile, cocoa production has experienced substantial volatility. National output declined from approximately 1.04 million metric tonnes during the 2020/2021 crop season to around 531,000 tonnes in 2023/2024 before recovering to an estimated 700,000 tonnes in 2024/2025.
Global cocoa prices, which surged to record levels during recent supply shortages, have since moderated amid concerns about weaker chocolate demand and rising exchange inventories. Lower prices could potentially reduce export earnings available to support sector financing and farmer incomes.
However, supply-side risks remain elevated. Forecasts suggesting a high probability of El Niño conditions have raised concerns about weather-related disruptions across West Africa, while early assessments of the 2026/2027 crop indicate below-average cocoa tree development.
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