Ivory Coast (Côte d’Ivoire), the world’s leading cocoa producer, has raised the price it pays farmers for cocoa, overtaking Ghana’s rate.
Despite this increase, growers in both countries still receive significantly less than the global market prices.
Côte d’Ivoire’s Agriculture Minister, Kobenan Kouassi Adjoumani, announced in Abidjan that the government has increased the farmgate price by 20 percent to 1,800 CFA francs ($3.06) per kilogram for the harvest starting on October 1.
This new rate, which equates to $3,060 per tonne, surpasses the $3,039 per tonne that Ghana has been paying its farmers since the beginning of the cocoa season this month.
The price hike is intended to curb the smuggling of Ivorian cocoa into Ghana, the world’s second-largest cocoa producer.
However, this measure might not fully address illegal exports to other neighboring countries, such as Liberia and Guinea, where buyers offer rates closer to the global market prices.
Last season, West African cocoa production was hit hard by poor weather, disease, and a lack of farming inputs, resulting in a significant decrease in output.
This caused cocoa futures to reach record highs, peaking at over $11,000 per tonne earlier this year, although they have since dropped to about $7,700 per tonne in New York as of Monday.
Despite the surge in global prices, the pricing system imposed by the governments of Côte d’Ivoire and Ghana has prevented farmers from reaping the benefits of the market rally, discouraging investment in cocoa farms and encouraging smuggling to countries with less regulated and higher-paying markets.
In response to these challenges, Minister Adjoumani revealed that Côte d’Ivoire will start harmonizing its output control, pricing, and marketing system with Ghana from the 2024-25 season as part of a “strategic cooperation” between the two nations.
Côte d’Ivoire has increased the farmgate price for coffee by 67 percent to 1,500 CFA francs per kilogram, reflecting broader efforts to support the agricultural sector.
