Ghana has announced a new cocoa producer price of GH¢41,392 per tonne (GH¢2,587 per bag) for the remainder of the 2025/2026 cocoa season, reflecting 90 per cent of the achieved gross Free on Board (FOB) price of US$4,200 per tonne.
The adjustment comes as part of a broad package of reforms aimed at stabilising the cocoa sector, addressing liquidity constraints, and safeguarding the welfare of farmers amid falling global prices.
The latest price decision follows the sharp decline in world cocoa prices from an average of US$7,200 per tonne to about US$4,100 per tonne, which prompted the Producer Price Review Committee (PPRC) to meet on Thursday to reassess the domestic producer price.
Finance Minister, Ato Forson said the reforms were necessary due to significant price distortions and financial challenges recorded in the sector over the past three years.
The difficulties intensified after 1st October 2025, when Côte d’Ivoire increased its producer price by 20 per cent above Ghana’s. The resulting disparity, compounded by exchange rate movements, heightened the risk of large‑scale smuggling of Ghanaian beans across the border.
To mitigate the threat, the PPRC earlier adjusted Ghana’s price to GH¢58,000 per tonne, based on an exchange rate of GH¢0.50 to US$1, restoring competitiveness and reducing incentives for diversions.
From October 2025, however, global cocoa prices began to fall. COCOBOD continued forward sales until prices slipped below US$6,400 per tonne—the estimated cost of transporting cocoa from farm gate to market—making Ghana’s beans expensive relative to competitors and reducing demand.
Government noted that liquidity challenges further constrained COCOBOD’s ability to purchase and stock beans for hedging. The buyer‑financed model introduced after the collapse of the long‑standing syndicated loan arrangement deteriorated by 2022, resulting in defaults and a restructuring of cocoa bills in 2023.
That year, the annual syndicated facility faced unprecedented delays due to weakened investor confidence, with the first tranche arriving only on 22 December 2023—four months late. COCOBOD had projected 800,000 tonnes of output and contracted 786,672 tonnes for the 2023/2024 season, but actual production fell drastically to 432,145 tonnes, marking a 45 per cent shortfall.
The production deficit led to rollover contracts amounting to 333,767 tonnes at an average price of US$2,661 per tonne, generating losses exceeding US$1 billion. Additional liabilities, including a US$70 million bridge financing and a default on the final tranche of the syndicated loan in 2024, further weakened the Board’s financial position.
A Cabinet review concluded that the sector had endured years of mismanagement requiring urgent reforms. COCOBOD has therefore been directed to immediately clear all outstanding arrears owed to farmers.
A new Cocoa Board Bill will soon be laid before Parliament to introduce an automatic adjustment mechanism for producer prices, ensuring alignment with world market dynamics and guaranteeing farmers at least 70 per cent of the gross FOB price.
Beginning 2026/2027, government will introduce a new financing model using domestic cocoa bonds to improve liquidity and support a revolving fund for indigenous Licensed Buying Companies, including the Produce Buying Company (PBC), which is expected to resume full operations.
Government has also directed that all remaining beans for the 2025/2026 season be supplied to domestic processors.
From the 2026/2027 season, at least 50 per cent of Ghana’s cocoa is to be processed locally to boost value addition and job creation. The Cocoa Processing Company (CPC) will be revived to anchor the industrialisation push.
Cabinet further approved the conversion of GH¢5.8 billion in legacy COCOBOD debts owed to the Ministry of Finance and the Bank of Ghana, as well as the transfer of GH¢4.35 billion in cocoa road liabilities to the Ministries of Roads and Highways and Finance.
The Attorney‑General has commissioned a forensic audit and criminal investigations into COCOBOD’s activities over the past eight years to enhance accountability and restore public confidence.
Government expressed gratitude to cocoa farmers and stakeholders for their patience and assured them that the new measures would protect livelihoods and secure the long‑term sustainability of Ghana’s cocoa industry.
By: Christian Akorli
