After the Ivory Coast decided to boost its farmgate price for cocoa and surpass Ghana’s rate, there is now a greater chance of cocoa smuggling into Ghana.
The largest cocoa producer in the world is taking this action to deter illegal bean exports, but it will present serious obstacles for Ghana’s cocoa sector.
Kobenan Kouassi Adjoumani, the Minister of Agriculture for Ivory Coast, declared in Abidjan that, as of October 1, 2024, the farmgate price would rise by 20%, from 1,500 CFA francs (about GH₵40) to 1,800 CFA francs (roughly GH₵ 48) per kilogram.
This new figure is marginally more than Ghana’s GH₵3,000 per bag of cocoa, coming to about GHS 3,072 per 64 kg bag. The purpose of the price increase is to stop cocoa from being smuggled into Ghana.
It might not, however, fully eliminate illicit exports to neighboring nations like Guinea and Liberia, where purchasers offer prices that are more in line with the international market rate.
Ivory Coast reportedly lost between 150,000 and 200,000 tons of cocoa to smuggling during the 2023–2024 season, according to Bloomberg.
Ghana, the second-biggest cocoa producer in the world, has been dealing with comparable problems.
According to Reuters reports, some farmers have been forced to sell their cocoa to sophisticated smuggling networks due to low local pricing and payment delays.
Ghana lost almost 160,000 metric tons of cocoa to smuggling in the 2023–2024 season, up from 150,000 tons the year before.
Smuggling was encouraged by Ghana’s cheaper rates when compared to neighboring nations like Côte d’Ivoire, which charged about GHS 2,560 per bag in 2023/2024—GH₵ 490 more than Ghana.
The Ghana Cocoa Board (Cocobod) raised the farmgate price for the 2024–2025 season by 45%, from GHS 2,070 to GHS 3,000 per 64 kg bag, in an effort to lessen this impact.
The Dynamics
Ghana’s attempt to stop smuggling by raising farmgate prices, though, might not succeed. Ghana’s measures may be ineffective due to Ivory Coast’s recent price rise because smugglers still find their prices to be more attractive.
Prices for cocoa and chocolate have increased due to a four-year supply gap in the global cocoa market caused by poor harvests in Ghana and Ivory Coast.
Regretfully, because of widespread smuggling, Ghana has not profited from these higher worldwide prices.
By June 2023, Ghana’s cocoa production had plummeted to 429,323 metric tons, less than 55% of the average at the same stage in recent seasons.
This represents the biggest drop in more than 20 years.
