Islamabad, Nov 4: Cocoa farmers hoard beans in anticipation of price hike
Cocoa farmers in the world’s No.2 producer Ghana are hoarding beans in anticipation of higher prices, industry sources told Reuters, potentially squeezing supplies to a global cocoa market looking to recover from last season’s disastrous harvests.
A dozen farmers, purchasers, and representatives from the state regulator Cocobod confirmed the practice, though it was unclear how widespread the up-country bean stocking was. Some blamed the practice for the slowdown in bean purchases.
An unnamed cocoa farmer in south-central Ghana stated, “I have over 300 bags, but I won’t sell.” “I won’t sell until after Christmas.” As promised, we want to see if they will raise the price.
All of the reports claimed that farmers were responding to remarks made by Vice President Mahamudu Bawumia, who four weeks prior had promised to increase farmer prices to members of the ruling New Patriotic Party.
Bawumia, who is running for the presidency in Dec. 7 elections, was speaking in Sefwi Wiaso in southwestern Ghana, one of the country’s biggest cocoa growing towns. He has since said his comments had been misunderstood.
According to Cocobod officials, Ghana lost over one-third of its 2023–2024 cocoa production to smuggling, compounding the problems that caused production to drop to a level not seen in over two decades and contributed to record high cocoa prices worldwide.
Ghana increased the fixed farmgate price by over 45% to 48,000 cedis, or little less than $3,000, per metric ton for the 2024–25 season, which began in September, in an effort to increase farmer incomes and discourage smuggling.
But Ivory Coast, Ghana’s neighbor and the largest cocoa producer in the world, increased the price to 1,800 CFA francs ($3.00) per kilogramme, which is only marginally more than Ghana’s.
NO PRICE ADJUSTMENT
Local media quoted Bawumia as saying the government would bring the farmers’ price on par with Ivory Coast’s.
Speaking to Reuters on Friday, however, Bawumia said there would only be a price adjustment in the case of a “significant difference” between the two countries’ prices.
“As it is, there is no significant difference, so we are not adjusting prices,” he said.
Still, many farmers believe a price hike is on the way.
A district manager for one of the top five licensed cocoa buyers in Ghana told Reuters in the southeastern town of Suhum that purchases had slowed in October, citing farmers as saying they were keeping their beans because they heard prices would be increased.
Another senior buyer said some farmers, after hearing prices might be increased, had even asked that beans they’d already sold be returned.
Cocobod CEO Joseph Aidoo told local media on Monday that the farmgate price will be raised if the Ghanaian cedi currency depreciates, eroding farmers’ income.
However, Samuel Adimado, president of Ghana’s cocoa buyers’ association said the current price was optimal for farmers and would help Cocobod clear its debts.
“The question is, how long can you hoard? Once it’s not smuggled out, they (farmers) will eventually release it,” he said.
($1 = 600.2500 CFA francs)
