Ghana announced a 28.6 percent reduction in its cocoa producer price on Thursday, bringing it to 41,392 cedis (US$3,764) per tonne for the remainder of the 2025/2026 season, Finance Minister Cassiel Ato Forson said.
The move follows a nearly 70 percent fall in global cocoa prices from late 2024 highs, leaving traders with mounting stockpiles and liquidity challenges. Ghana Cocoa Board (Cocobod) reported around 50,000 tonnes of cocoa accumulating at ports. Including inland stocks and the mid-crop harvest expected from March to August, the total backlog could reach 300,000 tonnes.
Ghanaian authorities said the price cut was necessary to restore competitiveness in the international market. The existing pricing formula includes the London market price, an origin premium for quality, and a $400 per tonne living income differential introduced in 2020/2021.
Unlike neighbouring Côte d’Ivoire, which has maintained producer prices despite the slump, Ghana opted to adjust prices to ease pressures on traders and prevent further backlog.
The government also unveiled a domestic financing model: cocoa-backed bonds with repayments tied to harvest revenues. Forson said a bill would be submitted later in 2026 to link farmgate prices to international market levels while guaranteeing 70 percent of the free-on-board (FOB) price.
The measures aim to support producers while ensuring Ghanaian cocoa remains competitive amid volatile global markets.
Ghana is the world’s second-largest cocoa producer after Côte d’Ivoire, with the crop forming a key pillar of its economy and foreign exchange earnings. Cocoa production is concentrated in the Ashanti, Western, Central, and Eastern regions, with smallholder farmers accounting for the bulk of output.
The sector is regulated by the Ghana Cocoa Board (Cocobod), which sets producer prices, oversees marketing, and supports farmers with inputs, extension services, and financing. Ghanaian cocoa is renowned for its high quality and flavor, fetching premiums in international markets.
Price stability is critical for livelihoods, as millions of smallholders depend on cocoa for income. However, the industry is highly sensitive to global market fluctuations, climate variability, and logistical constraints, making policy interventions and market reforms essential to sustain production and competitiveness.
Background to Ghana’s Cocoa sector
Ghana is the world’s second-largest cocoa producer, accounting for roughly 20 percent of global supply, after Côte d’Ivoire. Cocoa is a cornerstone of the economy, contributing 4–6 percent of GDP and supporting about 800,000 farming households, most of whom are smallholders.
Farmgate prices, set by Ghana Cocoa Board (Cocobod), aim to balance farmer incomes with international competitiveness. The pricing formula includes three main components: the international market price (based on London futures), an origin differential reflecting bean quality, and a living income differential introduced in 2020/2021 to improve farmers’ earnings.
Global price fluctuations have historically driven adjustments. For example, during the 2024/2025 season, Ghana faced a near 70 percent drop in international cocoa prices from peak levels, prompting the government to cut the farmgate price by 28.6 percent in February 2026 to ease market congestion.
Cocoa pricing also interacts with domestic financing schemes. Cocobod-backed domestic cocoa bonds allow traders to secure short-term liquidity, with repayments linked to the revenue from the same cocoa harvest. This mechanism was designed to reduce port congestion and provide predictable cash flow for producers and exporters.
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Additionally, Ghana has been exploring price-indexed legislation, aiming to tie farmgate prices more closely to international prices while guaranteeing farmers a 70 percent minimum of the FOB price. These reforms reflect a broader strategy to make the sector more resilient to global shocks, maintain export competitiveness, and sustain rural livelihoods.
Beyond economics, cocoa pricing affects social programs. A portion of revenue supports farmer welfare, extension services, and initiatives to boost productivity and sustainability, such as the Cocoa Rehabilitation Program and climate-smart agriculture projects.
