COCOBOD Warns Strong Cedi Could Offset Benefits of Imminent Cocoa Price Increase
Ghana is preparing for a major adjustment in cocoa producer prices ahead of the next crop season, a move designed to align with the unprecedented surge in global cocoa prices. But while this price hike should, in theory, translate into higher earnings for local farmers, the Ghana Cocoa Board (COCOBOD) has issued a cautionary note: the sharp appreciation of the Ghanaian cedi could erode much of the intended benefits.
Speaking in an interview on PM Express Business Edition, COCOBOD’s Chief Executive, Dr. Randy Abbey, outlined both the opportunities and risks associated with the forthcoming price changes. He acknowledged that international cocoa prices are currently at historic highs, a trend that necessitates a substantial increase in what Ghanaian farmers are paid per ton. However, the strengthening of the cedi against major foreign currencies—particularly the U.S. dollar—poses a serious challenge.
According to Dr. Abbey, while the new prices will be impressive when calculated in dollar terms, the conversion into local currency could result in minimal net gains for the average cocoa farmer. “There is no doubt that global cocoa prices are experiencing a boom. Based on those figures, farmers should be expecting better pay,” he stated. “But the current strength of the cedi means that when those dollar values are translated into Ghana cedis, the expected boost in income may not be as impactful.”
This situation presents a dilemma for policymakers and cocoa sector stakeholders. On one hand, Ghana must remain competitive on the international cocoa market and reward its producers fairly. On the other hand, exchange rate dynamics are beyond the immediate control of institutions like COCOBOD and can significantly affect earnings in real terms.
“The reality is that even if cocoa prices go up globally, farmers might not feel it the way they should,” Dr. Abbey noted. “The cedi’s appreciation, while a positive sign for the broader economy, makes our job more difficult when trying to deliver real value to the cocoa farmer.”
COCOBOD is currently exploring options to shield farmers from the negative impact of these currency shifts. Dr. Abbey emphasized that the board is working to ensure the final producer price captures both international market conditions and domestic economic realities.
“We must find a solution that does not punish the farmer for factors outside of their control,” he said. “We are in dialogue with relevant stakeholders, including government and financial experts, to establish a pricing framework that offers stability and predictability.”
The board’s concerns come against the backdrop of broader debates around economic fairness in Ghana’s key export sectors. Cocoa is a vital part of the national economy, accounting for a significant portion of Ghana’s foreign exchange earnings. Ensuring that cocoa producers receive equitable compensation has always been a top priority, particularly in rural communities where cocoa farming is the primary source of livelihood.
Experts argue that this latest development highlights the urgent need for mechanisms to buffer farmers from exchange rate volatility. Suggestions have included currency hedging strategies, stabilization funds, and more dynamic pricing models that adjust more frequently in response to market changes.
As the country moves closer to announcing the new cocoa producer price for the 2024/2025 season, the discussion initiated by COCOBOD serves as a critical reminder: while macroeconomic indicators may show progress, the true test lies in how that progress translates into tangible benefits for everyday citizens—especially the farmers who form the backbone of Ghana’s agricultural economy.
In the coming months, the cocoa industry and its stakeholders will need to carefully weigh market opportunities against currency risks to ensure that Ghana’s farmers are not left behind in a moment of global prosperity.
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