Some of Ghana’s farmers have not been paid and investment in the next harvest is at risk as international traders refuse to pay the upfront sums the state regulator has sought under a new model for purchasing cocoa beans, sources said.
The revamped system, introduced for the 2024/25 season, shifted the burden of pre-financing purchases from the Ghana Cocoa Board, or COCOBOD, to international traders.
Following better than expected production this season, the traders’ unwillingness to pay deposits of at least 60% of the value of forward contracts at the start of the season has left the world’s second-largest producer with a big stockpile, three sources familiar with the situation said, though they were unable to quantify the stockpile.
COCOBOD did not respond to requests for comment.
Falling international cocoa
A global surplus has driven down cocoa prices by around 20% so far this year after a 50% drop last year. In 2024, internationally-traded cocoa prices surged by 160% .
Under Ghana’s cocoa financing system, farmers sell beans to the licensed buying companies that in turn sell them to COCOBOD, which sells to international traders through its marketing company.
A source at a licensed buying company, or local state-approved cocoa buyer, said the fall in international prices meant COCOBOD was struggling to persuade international traders to make advance payments to secure supplies.
A second source at a licensed buying company told Reuters Ghana’s farmgate price set annually by the regulator was untenably high.
Ghana in October said it was setting its farmgate price at 58,000 Ghana cedis ($4,640.00) per metric ton, an increase of 12%. International prices are trading at around $4,700 a ton.
Revision of a decade-old system
Under the previous system that had been in place for three decades, COCOBOD raised funds annually via syndicated loans and disbursed them to the licensed buying companies, which in turn bought beans from farmers and delivered them to the regulator for onward sale to the international markets.
A second source at a licensed buying company told Reuters Ghana’s farmgate price set annually by the regulator was untenably high.
Ghana in October said it was setting its farmgate price at 58,000 Ghana cedis ($4,640.00) per metric ton, an increase of 12%. International prices are trading at around $4,700 a ton.
Speaking on Saturday, Stevenson Anane Boateng, president of the Ghana National Association of Cocoa Farmers, told a local radio station that farmers had not been paid since November.
It was unclear how many farmers had not been paid.
Theophilus Tamakloe, vice president of the Ghana Cooperative Cocoa Farmers Association, told Reuters that payment delays threaten farmers’ ability to service bank loans and conduct maintenance that should be done in January, such as pruning and applying fertiliser.
