Cocoa farmers in Ghana, the world’s second-largest producer, are hoarding beans in anticipation of higher prices, industry sources told Reuters, which could reduce supplies to the global cocoa market seeking to recover from harvests disastrous last season.
Although the extent of bean storage in the country’s interior is unclear, a dozen farmers, buyers and officials from the national regulator Cocobod have confirmed the practice, with some attributing it to a slowdown in bean purchases.
“I have more than 300 bags, but I won’t sell them,” said a cocoa farmer in south-central Ghana, who asked not to be named. “I won’t sell until after Christmas. We want to see if they will increase the price like they said.”
The sources all indicated that producers were reacting to comments by Vice President Mahamudu Bawumia, who told supporters of the ruling New Patriotic Party four weeks ago that the government would increase prices for producers.
Mr. Bawumia, who is running for president in the December 7 elections, was speaking in Sefwi Wiaso in southwest Ghana, one of the country’s largest cocoa-producing towns. He has since said his comments were misunderstood.
According to Cocobod officials, Ghana has lost more than a third of its cocoa production for 2023/24 due to smuggling, adding to challenges that have brought production to its lowest level since more than two decades and which helped push global cocoa prices to record levels.
In a bid to boost farmers’ incomes and discourage smuggling, Ghana increased the fixed producer price by almost 45 percent to 48,000 cedis, or just under $3,000, per metric ton for 2024/25 season, which started in September.
However, Ivory Coast – Ghana’s neighbor and the world’s largest cocoa producer – increased its price to 1,800 CFA francs ($3.00) per kilogram, slightly more than Ghana’s.
NO PRICE ADJUSTMENT
Local media quoted Bawumia as saying the government would align farmers’ prices with those in Ivory Coast.
Speaking to Reuters on Friday, however, Bawumia said there would only be a price adjustment if there was a “significant difference” between the two countries’ prices.
“As it stands, there is no significant difference, so we are not adjusting prices,” he said.
However, many farmers believe a price increase is in sight.
A district manager of one of Ghana’s top five cocoa buyers told Reuters in the southeastern town of Suhum that purchases had slowed in October as farmers said they were conserving their beans because they had heard that prices were going to increase.
Another major buyer said some farmers, upon hearing that prices might be increased, even requested that the beans they had already sold be returned.
Cocobod CEO Joseph Aidoo told local media on Monday that the producer price would be increased if the Ghana cedi depreciated, thereby eroding farmers’ incomes.
However, Samuel Adimado, president of the Ghana Cocoa Buyers Association, said the current price was optimal for farmers and would help Cocobod clear its debts.
“The question is how long you can hoard. Once there is no more contraband, they (farmers) will eventually release it,” he said.
(1 dollar = 600,2500 francs CFA)
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