Dr Ahmad Jazayeri – ahmad.jazayeri@gmail.com
In recent months, global cocoa prices have reached record highs, crossing $10,000 per ton on international markets — a level unseen in modern history. Yet, in Ghana’s cocoa-growing regions, the story is heartbreakingly different.
Farmers remain trapped in poverty, unable to meet rising production costs, and disillusioned with a pricing system that seems designed to protect the buyers more than the producers themselves.
The current price offered to the farmers, even after a recent (November 2024) 125% price increase, is GH¢ 49,600 per ton, which was approximately $3,062 per ton at that time. This translates to about $191.38 per 64kg bag.
In November 2024, international cocoa prices experienced significant increases, with the average cocoa price at $7,895 per metric ton during that month. In other words, the farmers are receiving approximately 38% of the international price.
In the 2024/2025 cocoa season, the Ghana Cocoa Board (COCOBOD) faced significant challenges due to undelivered contracts from the previous season.
Specifically, COCOBOD was unable to deliver 333,767 tons of cocoa that had been sold at approximately $2,600 per ton during the 2023/2024 season. As a result, these contracts were rolled over into the 2024/2025 season.
During this period, global cocoa prices surged to around more than $7000 per ton. This meant that COCOBOD had to fulfill the previous contracts at the lower, pre-agreed price of $2,600 per ton, leading to an estimated loss of about $4,000 per ton.
Collectively, this amounted to a potential revenue loss of approximately $1.3 billion for Ghana. To mitigate these financial challenges, COCOBOD implemented a strategy of blending old and new contracts.
For every ton delivered under the old contracts, companies were required to purchase an additional ton at the current season’s spot prices of around $6,600/ton. This approach effectively averaged the selling price to around $5,000 per ton.
What is ironic is that while the Producer Price Review Mechanism (PPRM) officially claims that at least 70% of the net (FOB) price should go to farmers, in 2024/2025, because of previous COCOBOD commitments, the producers could not benefit from higher prices of the season and received only around 46% of the FOB price of $6,600 and 61% of the average lowered price of $5000 – a far cry from 70% of the FOB price which should have reflected the seasonal international prices of $7,800 as at November 2024.
Let’s put this in perspective. COCOBOD has faced a perfect storm:
- Massive debts from syndicated loans and bond repayments
- Subsidy programs it could no longer sustain (like fertilizer support)
- Currency depreciation and inflation in operational costs
- A dysfunctional market structure where buyers (via Licensed Buying Companies, LBCs) have more flexibility than farmers
To maintain its own solvency, COCOBOD seems to have effectively sacrificed the farmers’ share, while still upholding the myth of a 70% commitment. This is not just bad policy — it’s a breach of public trust.During a recent field study in the Western Region of Ghana — I visited three cocoa-producing areas.
What I saw was not just economic hardship, but a governance crisis. COCOBOD, which once provided critical fertilizer subsidies to cocoa farmers, was unable to do so last year, and again this year, as the time for fertilizing the trees is February/March, and it has now passed.
Farmers now face input costs of over GHS 10,000 per acre just to maintain their farms. Without fertilizer, pest control, and other inputs, yields plummet.
In response, some Rural and Community Banks have attempted to step in with financing schemes. But repayment rates have been underwhelming, owing to compounding factors: drought, disease outbreaks, falling yields, and — most critically — the low farmgate price.
At a time when global markets are booming, the farmgate price remains artificially fixed, and any violator can be legally prosecuted. The result? Farmers are locked out of the very profits they help generate.
This is where the core of the problem lies. Ghana’s cocoa pricing system, managed by COCOBOD, is designed around predictability and buyer assurance, not farmer empowerment.
The producer price is fixed annually — not in response to global market trends, but based on pre-arranged syndicate loans, operational costs, and the perceived need for “stability.” While this may protect COCOBOD’s financial planning and reassure multinational chocolate companies, it actively suppresses farmer income during boom years. That trade-off is rarely questioned — and even more rarely challenged.
To be clear, price stabilization is not inherently bad. Farmers are indeed vulnerable to volatile swings in commodity markets.
But fixing prices should not become a mechanism to shield international buyers at the expense of domestic producers. Yet that is precisely what is happening.
Farmers I spoke with understand this. They know global prices are skyrocketing — some have smartphones and WhatsApp groups where price charts are shared. They ask why they still receive a fraction of those prices. They wonder who exactly COCOBOD is protecting.
The financial crisis facing COCOBOD itself only adds urgency to reform. With rising debt and recent delays in syndicated loan disbursements, there are fears that COCOBOD may not have sufficient liquidity to support the upcoming season.
Meanwhile, Licensed Buying Companies (LBCs) and Rural Banks, lack the capital to prefinance inputs. This convergence of broken finance and fixed pricing is a ticking time bomb — one whose impact will fall hardest on the farmer.
If Ghana is serious about securing the future of its cocoa sector, the pricing model must change.
We need a transparent, participatory mechanism that allows farmer voices to shape pricing policy. The current so-called participation of farmer representatives at the PPRM is more formal than real.
No wonder why in October 2024, a group of Ghanaian cocoa farmers filed a complaint highlighting issues related to pricing and representation.
Real-time market adjustments, a reserve fund to manage shocks, and greater flexibility in COCOBOD’s financial operations would be steps in the right direction.
Ghana’s cocoa farmers are not asking for handouts. They are asking for fairness — a share in the wealth they create. As global prices soar, the question for Ghana’s cocoa sector is simple but profound: whose interests are we really protecting?