Ghana raises cocoa prices paid to farmers by 63%
Ghana on Monday increased the producer price of cocoa by more than 60 percent ahead of the 2025-26 season, a move expected to put pressure on top cocoa-producing rivals like Ivory Coast.
The move could also raise global cocoa costs even further, at a time when supply chains are already tightening due to climate shocks and ageing farms.
Finance Minister Cassiel Ato Forson said the rate paid to farmers will rise from $3 100 to $5 040 (R91 000) per tonne, a 62.58-percent increase.
"The cocoa farmer remains a critical pillar of our economy, and this government is committed to ensuring they benefit from the gains we are making," the minister said at a news conference in the capital Accra.
Ghana, the world's second-largest cocoa producer, typically sets its prices ahead of Ivory Coast, which leads global production. The Ivorian government is currently paying farmers 1 500 CFA francs (R45) per kilogramme, about $2 440 per tonne.
The substantial increase in Ghana is in line with a campaign promise by President John Mahama, elected in December, to raise cocoa farmers' share of export earnings to at least 70 percent of the Free-On-Board (FOB) value - the price of cocoa at the point it is loaded onto a ship for export.
The FOB price has shot up in recent years, with the current $7 200 price reflecting a blend of earlier contracts signed at $2 600 per tonne during the 2023-24 season and forward sales forecasts for 2025-26, Forson said.
Farmers were previously only receiving 63.9 percent of the FOB price, or $3 100 of the $4 850 FOB value, in the 2024-25 season.
Forson said the revised price also accounts for improved macroeconomic conditions, including a strengthening cedi and easing inflation.
Ghana's price controls are meant to stabilise earnings for farmers, especially during price dips, but critics say they have lagged behind market highs, especially in recent years as global prices have spiked.
In response, some farmers have joined the country's gold rush, selling off land to informal miners - many of whom have left environmental destruction in their wake, further squeezing production.
Getting fair prices for farmers - at the bottom of cocoa's global value chain - has long been a goal of both activists and west African governments, with fingers pointed at both private firms and buyers as well as official corruption.
Forson also announced the reintroduction of the government's free cocoa fertiliser programme, which includes the distribution of fertilisers, insecticides, fungicides, spraying machines and flower inducers to increase yields and income.
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