2022/23 cocoa harvest begins with sharp hikes in farmgate prices
The main-crop season started on Oct. 1 with an increase to the farmgate price for Ivory Coast farmers. The price was raised from 825 CFA to 900 CFA francs per kg (about $1.36 per kg) in a bid boost incomes and improve the livelihoods of farmers.
Cocoa farming produces roughly 15 percent of the country’s annual GDP, and the old-season’s farmgate pricing had led to widespread protests and unease. Ghana followed with an even larger increase to 12,800 cedis per MT for its farmgate prices, up 21 percent from the old season.
Recent depreciation of the Ghanian cedi vs. the dollar heightened pressure on the government to raise prices—as did the move by Ivorian officials. Ghana last raised the price back in 2020, by 28 percent, but there was no change last season. There had also been calls to raise prices to help farmers with significant cost increase for fertilizer as well as to help implement a new farmer pension scheme.
Output in Ghana fell this past season on atypically dry weather during harmattan, reduced fertilizer use due to higher costs, and competition from gold mining. Faced with annual inflation rates under 10 percent and competition from other higher prices for cash crops such as cashews, rubber, and palm oil, COCOBOD may have felt compelled to act to stem any further decline in Ghana’s cocoa output.
Heavy rains over the past 90 days are fueling concerns of disease such as swollen shoot and black pod. Too much rain can increase the incidence of mold and fungus and also impede drying and transport of cocoa from upcountry to port cities. Meanwhile, expectations are that early arrivals in neighboring Ivory Coast will be especially strong due to cocoa intentionally held back to blend with early main-crop beans in anticipation of farmgate price hikes.
The market remains quiet ahead of Q3 grind releases expected in the third week of October.
Ivory Coast & Ghana farmgate price history (U.S. dollars)
Source: McKeany-Flavell, CCC, COCOBOD
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