Business News Fri, 9 Aug 2019
Ghana will raise cocoa farmgate prices by 5.2% for the 2019/20 season, the first increase in four years, following strong sales of export contracts to chocolate makers and cocoa houses, industry sources have told Reuters.The farmgate price will rise to GH¢8,000 (US$1,523.81) per tonne for the season starting in October from GH¢7,600 per tonne last season, the sources at industry body Cocobod and its marketing arm Cocoa Marketing Company (CMC) said on Tuesday.
The price has been unchanged for the past three seasons in Ghana, the world’s second-biggest cocoa producer.
“The price will be around GH¢8,000 per tonne next season. That’ll be GH¢500 per bag, and it’s something that cocoa farmers deserve,” a CMC source said.
Ivory Coast, the biggest producer, will also raise its farmgate price, sources said last month.
Ghana’s Producer Price Review Committee, which sets the farmgate price, meets annually in September to decide a price, and the official announcement is made in early October before the cocoa season starts, sources said.
“Inflation and interest rates are now low in Ghana at the moment, and aside from the election (in December 2020), another possible reason for a hike would be the positive gains cocoa made this year,” another source at Cocobod said.
Ghana produced 794,000 tonnes of cocoa this season, down 11.7% from the last season.
Ghana and Ivory Coast joined forces in June to impose a floor price for cocoa of US$2,600 per tonne and a living income differential (LID) of US$400 per tonne. They have also been in talks for two years about simultaneously announcing their farmgate prices.
The two countries are also working together to set prices close enough to avoid cocoa smuggling on their border.