Ivory Coast (Côte d’Ivoire), the world’s leading cocoa producer, has raised the price it pays farmers for cocoa, surpassing Ghana, even as growers in both countries continue to receive significantly less than global market prices.
The Ivorian government has increased the farmgate price by 20% to 1,800 CFA francs ($3.06) per kilogram for the upcoming harvest starting on October 1, announced Agriculture Minister Kobenan Kouassi Adjoumani in Abidjan.
This new rate, equivalent to $3,060 per tonne, slightly exceeds Ghana’s payment of $3,039 per tonne to its farmers since the start of the cocoa season this month.
The price increase may help reduce the smuggling of Ivorian cocoa into Ghana, the world’s second-largest cocoa producer, although it may not entirely eliminate the issue of illegal exports to neighboring countries like Liberia and Guinea, where buyers offer prices closer to the global market rates.
Last season, cocoa output in West Africa was adversely affected by poor weather, disease, and a lack of farming inputs, leading cocoa futures to reach record highs, peaking at over $11,000 per tonne earlier this year.
However, futures have since dropped, trading at approximately $7,700 per tonne in New York on Monday.
Despite the surge in global cocoa prices, the pricing systems established by the governments of Côte d’Ivoire and Ghana have limited farmers’ ability to fully benefit from the market rise.
This situation has discouraged investment in cocoa farms and contributed to smuggling into neighboring countries, where markets are less regulated and prices are higher.
Côte d’Ivoire reportedly lost between 150,000 and 200,000 tonnes of cocoa to smuggling during the crop year ending Monday, according to a Bloomberg report from September 19.
To tackle these challenges, Côte d’Ivoire plans to harmonize its output control, pricing, and marketing systems with Ghana starting from the 2024-25 season as part of a “strategic cooperation” between the two countries, Adjoumani stated.
Additionally, the farmgate price for coffee in Côte d’Ivoire has been raised by 67% to 1,500 CFA francs per kilogram.
