TEPA, Ghana - September 10 - In an effort to bolster the income of its cocoa farmers and curb cross-border bean smuggling fueled by higher prices in neighboring countries, Ghana has significantly increased its state-guaranteed cocoa farmgate price. President Nana Akufo-Addo announced this landmark decision at the launch ceremony of the 2023/2024 cocoa season in the western Tepa cocoa-growing district.

Starting from September, Ghanaian cocoa farmers will receive 20,943 Ghana cedi ($1,837) per tonne, marking an impressive 63% increase from the 2022/2023 season's rate of 12,800 Ghana cedi. President Akufo-Addo proudly declared that this new rate stands as the highest paid to farmers in West Africa in over half a century.

This move aligns with the backdrop of soaring cocoa futures, which have recently hit a 46-year high due to concerns over dwindling supplies from the region. West Africa is responsible for sourcing approximately 70% of the world's cocoa, a key ingredient in chocolate production.

In response to the market dynamics, December London cocoa settled up 73 pounds, or 2.5%, at 3,050 pounds per metric ton, touching its highest level since 1977 at 3,053 pounds ($3,805).

The surge in prices has been driven by various factors, including crop issues such as the prevalence of black pod disease in West Africa, contributing to a substantial global cocoa deficit in the 2022/2023 season (October/September).

President Akufo-Addo assured the crowd of enthusiastic farmers, "With the predicted stable prices... the government will continue to honor our farmers with good prices in the years ahead."

Ghana's weakened cedi currency and a lower farmgate cocoa price in the 2022/2023 season compared to neighboring Ivory Coast, the world's largest cocoa producer, had led to cocoa smuggling to those countries as well as Togo. This contributed to an unexpectedly low total cocoa output in Ghana, prompting the government to conclude the season a month earlier than planned and begin the new season in September instead of October.

Leticia Adu Yankey of Ghana Civil Society Cocoa Platform, an independent advocacy group, noted, "The price difference has been eliminated, and it is no longer profitable to sell cocoa to Ivory Coast and Togo."

Fiifi Boafo, Head of Public Affairs at the regulator COCOBOD, shared that Ghana is aiming for an output of 820,000 metric tons for the 2023/2024 season following the farmgate price increase. He also acknowledged that Ghana lost around 150,000 metric tons of cocoa in the current season due to smuggling and the adverse effects of artisanal gold mining, known as "galamsey," which is causing extensive damage to cocoa farms.

Boafo disclosed that Ghana intends to secure $1.2 billion for its annual cocoa purchases, with $800 million coming from a consortium of banks and an additional $400 million from other sources.

In a parallel development, Cameroon, another prominent West African cocoa producer and the world's fourth-largest, has raised its farmgate cocoa price by 25% to approximately 1,500 CFA franc per kilogram for the 2023/2024 season.