Agriculture

Cocoa farmgate prices see another reversal

The report shows that the farm-gate prices in US$ nominal terms have been higher in Ghana than in neighbouring Côte d’Ivoire over the past five mid-seasons. However, the situation was reversed during the mid-crops for 2021/22 and 2022/23 seasons – mainly due to substantial depreciation of the cedi (GH¢) vis-à-vis the US dollar.

For the 2022/23 mid-crop, the Ivorian and Ghanaian regulators have left unchanged the fixed farmgate price at 900 XOF per kg (US$1,507 per tonne) and GH¢12,800 per tonne (US$1,206 US per tonne) respectively.

The report further indicates that the reversal of farm-gate prices in Ghana’s cocoa industry is largely attributed to the global economic challenges which have affected Ghana’s currency. The depreciation of GH¢ vis-à-vis US$ is a result of several factors – including the COVID-19 pandemic, low commodity prices and the country’s debt burden.

Cedi’s worst run

The cedi wobbled after a wave of sovereign downgrades and speculations. The GH¢ endured a torrid 2022, ending the year as the fourth worst-performing currency globally and trading at a mid-rate of GH¢11.60 /US$ (YTD loss of 44.05%). The local unit suffered from a raft of sovereign downgrades that dimmed investor confidence.

Fitch and Moody’s ratings downgraded Ghana into negative outlook territory at the start of 2022, leading to a loss of access to the international capital market (ICM). The loss of access to the ICM posed some risks to international reserves and the country’s ability to meet external financing obligations.

The cedi endured its worst run of form yet, as it depreciated 33.22 percent from Sep-22 to Nov-22 to emerge as the worst-performing currency globally. During this period, the GH¢ was quoted at 15/US$1 on the forex market as speculative attacks severely weakened the local unit.

However, the local unit gained 27.16 percent to end Dec-22; primarily due to positive sentiments from an IMF staff-level agreement, reduced speculative attacks and softened stance of the US Fed.

Despite the challenges faced by Ghana’s cocoa industry, the country has made significant strides in boosting its cocoa production over recent years. Several initiatives have been implemented to support the industry, including the Cocoa Farmers Pension Scheme, the Cocoa Rehabilitation Programme, and the Cocoa Disease and Pest Control Programme.

Ghana surpasses Ivory Coast in cocoa production

Ghana has surpassed Ivory Coast in cocoa production over the half-year 2022/23 crop season, according to the ICCO report. As of 31 March 2023, cumulative arrivals of cocoa beans in Ivory Coast were lagging behind previous season levels, while the volumes of graded and sealed cocoa beans purchased in Ghana since start of the 2022/23 season was reported at 566,846 tonnes; representing an 18 percent increase from the previous year.

Despite an increase in the country’s cocoa production, total supply of cocoa beans from the top-two world cocoa producers for the first half of 2022/23 is estimated at 2,345,846 tonnes, slightly down by 0.2 percent compared to the previous season.

The ICCO report states that the year-on-year reduction of 89,000 tonnes in Ivory Coast’s cumulative ports’ arrival of cocoa beans over the first half of the 2022/23 cocoa year, combined with the increase of 85,360 tonnes over the same period in Ghanaian purchases of graded and sealed cocoa beans, results in a slightly negative net effect.

The report also stated that the current state of play is subject to change as the mid-crop progresses. However, the current situation shows that Ghana has overtaken Ivory Coast in cocoa production; a significant development in the global cocoa market.

The domestic cocoa industry is facing significant challenges due to global developments, including depreciation of the GH¢ vis-à-vis the US$. However, the Regulator remains committed to supporting its cocoa farmers and improving the industry’s performance through various initiatives.

The reversal of farmgate prices in the past five mid-seasons is a concern, but Ghana’s cocoa industry is expected to bounce back with the right support.

 

Source: thebftonline.com

Ogyem Solomon

Solomon Ogyem – Media Entrepreneur | Journalist | Brand Ambassador Solomon Ogyem is a dynamic Ghanaian journalist and media entrepreneur currently based in South Africa. With a solid foundation in journalism, Solomon is a graduate of the OTEC School of Journalism and Communication Studies in Ghana and Oxbridge Academy in South Africa. He began his career as a reporter at OTEC 102.9 MHz in Kumasi, where he honed his skills in news reporting, community storytelling, and radio broadcasting. His passion for storytelling and dedication to the media industry led him to establish Press MltiMedia Company in South Africa—a growing platform committed to authentic African narratives and multimedia journalism. Solomon is the founder and owner of Thepressradio.com, a news portal focused on delivering credible, timely, and engaging stories across Ghana and Africa. He also owns Press Global Tickets, a service-driven venture in the travel and logistics space, providing reliable ticketing services. He previously owned two notable websites—Ghanaweb.mobi and ShowbizAfrica.net—both of which contributed to entertainment and socio-political discussions within Ghana’s digital space. With a diverse background in media, digital journalism, and business, Solomon Ogyem is dedicated to telling impactful African stories, empowering youth through media, and building cross-continental media partnerships.

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