Ghana and Cote d'Ivoire disagree on cocoa prices as new season starts

desmond frimpong

October 2, 2017 10:46 AM

Price gap likely to raise large-scale smuggling of Ivorian beans into Ghana.

The West African cocoa producing company says it will not lower the producer price at which it purchases cocoa beans from farmers despite calls from top grower Ivory Coast to do so.

Officials from Ghana's cocoa regulator Cocobod is hinting of plans to open the 2017/18 cocoa season on Oct 13 after receiving part of a syndicated loan it signed to cover its purchasing needs.

Cocobod signed a $1.3 billion loan with international lenders for the new season’s purchases, estimated at around 850,000 tonnes. The first tranche of the money is expected to arrive in the regulator’s account very soon, one official said.

Since last year Ghana has maintained its price at $1,914 per tonne. This development, experts say creates pricing gap of more than $700 per tonne.

Ghana, the world’s number two cocoa grower, maintained its price throughout the last season and has hinted that it will keep it unchanged or even raise it in 2017/18.

On the other hand, Ivory Coast is set to lower its prices for farmers at 700 CFA francs ($1.27) per kilogram for the 2017/18 main crop season.

This would open a significant price gap with Ivory Coast, raising the risk of large-scale smuggling of Ivorian beans into Ghana.

Ghana closed its 2016/17 crop year on Sept. 14 with output expected to total around 950,000 tonnes, the highest since a record 1 million tonnes in 2010/11.

desmond frimpong