The country is again faced with a heightened risk of cocoa smuggling following Ivory Coast’s recent decision to raise its farm-gate price for cocoa, surpassing our rate.
While the move by the world’s largest cocoa producer aims to discourage illicit export of beans, it poses significant challenges for Ghana’s cocoa industry.
Ivory Coast’s Minister of Agriculture, Kobenan Kouassi Adjoumani, announced in Abidjan that the farm-gate price will increase by 20% from 1,500 CFA francs (approximately GH₵40) to 1,800 CFA francs (about GH₵48) per kilogramme, effective October 1, 2024.
This translates to roughly GH¢3,072 per 64kg bag of cocoa, slightly higher than Ghana’s GH₵3,000 per bag. Incidentally, the price hike is intended to prevent smuggling cocoa to Ghana.
According to Bloomberg, Ivory Coast reportedly lost between 150,000 to 200,000 tonnes of cocoa during the 2023/2024 season because of smuggling – and Ghana has been battling similar issues.
Reuters reports that low local prices and payment delays have driven some farmers to sell their cocoa to sophisticated smuggling networks. In the 2023/2024 season, Ghana lost approximately 160,000 metric tonnes of cocoa to smuggling; an increase from 150,000 tonnes in the previous season.
To mitigate this, the Ghana Cocoa Board (Cocobod) increased its farm-gate price by 45% for the 2024/2025 season; from GH₵2,070 to GH₵3,000 per 64 kg bag.
Poor harvests in Ghana and Ivory Coast have contributed to a four-year supply deficit in the global cocoa market, driving up cocoa and chocolate prices. Ghana has not benefitted from these higher global prices due to rampant smuggling.
Côte d’Ivoire and Ghana account for 68% of global cocoa supply yet cannot form a joint initiative to control prices. However, Africa’s cocoa producing countries capture just 3% of global chocolate industry revenue, according to figures from the International Cocoa Organisation (ICCO).
We recall that back in March 2018, cocoa farmers and trade federations from Côte d’Ivoire and Ghana formed their first strategic partnership agreement. Through this partnership, Côte d’Ivoire and Ghana were to harmonise their sales policies to have greater impact and increase their earnings.
What has become of this arrangement?
