Ghana’s Cocoa Board Sells 150,000 Tons at $4,200 Per Ton, Minister Joseph Boahen Aidoo Eyes China-Africa Supply Pacts

Ghana’s Cocoa Board did not confirm selling 150,000 tons of cocoa at $4,200 per ton, despite reports circulating in April 2024, officials said. Minister Joseph Boahen Aidoo highlighted efforts to strengthen China-Africa supply agreements as the board faces buyer reluctance amid high pricing compared to global benchmarks.

Despite circulating reports in April 2024 that Ghana’s Cocoa Board (COCOBOD) sold 150,000 metric tons of cocoa at $4,200 per ton, officials have not confirmed such transactions, according to multiple sources. COCOBOD CEO Dr. Randy Abbey has not issued any statements verifying the sale, and no official records corroborate the claim, officials said. Current global cocoa prices range between $4,100 and $4,400 per ton, below Ghana’s total production cost of approximately $6,300 per ton, which includes haulage, grading, warehousing, and shipping expenses, according to industry data.

Ghana’s pricing model guarantees farmers a minimum of $5,040 per ton, which represents about 70% of the previous free-on-board (FOB) price averaging $7,200 per ton, officials said.

Buyers have so far purchased about 530,000 tons of the projected 650,000-ton output for the 2023/24 crop season but have shown reluctance to commit further due to Ghana’s relatively high prices compared with other cocoa-producing countries, sources confirmed. Finance Minister Cassiel Ato Forson acknowledged that the previous premium pricing made Ghanaian cocoa less competitive internationally. The farmgate price was recently reduced to $3,580 per metric ton to better align with the global benchmark, which has fallen to around $4,000 per ton, about half the level seen a year ago.

This model includes a $400 Living Income Differential (LID) designed to ensure fair wages for farmers but has contributed to the higher overall cost structure that deters some international buyers. The recent price adjustment to $3,580 per ton reflects efforts to balance farmer welfare with market competitiveness amid declining global prices.

International buyers have increasingly turned to alternative sources in West Africa, Latin America, and Asia, where cocoa prices are comparatively lower, according to market analysts. This shift has pressured Ghana to reconsider its pricing strategy and implement reforms to maintain its position as the world’s second-largest cocoa producer. Dr. Abbey lamented that the guaranteed high returns for farmers under the current pricing model have resulted in buyer reluctance, complicating efforts to clear the full crop output.

The government has introduced several measures to stabilize the sector, including the rollout of a domestic cocoa bond financing model managed by COCOBOD. This initiative aims to reduce reliance on external borrowing and improve cash flow by tying bond repayments to cocoa sales proceeds within the same crop year. Cabinet directives have also ordered the immediate repayment of outstanding farmer arrears through COCOBOD, providing financial relief to cocoa farmers, officials said.

Legislation is being planned to guarantee farmers at least 70% of the FOB price while simultaneously expanding local cocoa processing to add value domestically. The coalition of cocoa farmers has expressed willingness to accept lower future prices if arrears are cleared promptly, according to sources familiar with the negotiations. These reforms seek to address the challenges posed by the global price decline from previous highs and ensure the sustainability of Ghana’s cocoa sector.

Regarding reported efforts by Minister Joseph Boahen Aidoo to pursue China-Africa cocoa supply agreements, no verified information or official statements have been found to support such claims. Available data and government communications do not reference any China-related supply pacts or initiatives involving Ghana’s cocoa exports. The country’s current focus remains on domestic reforms, price adjustments, and improving buyer competitiveness rather than establishing new supply agreements with China, according to industry observers and official sources.

Ghana’s cocoa sector continues to navigate the complexities of fluctuating global prices, buyer preferences, and farmer welfare. The government and COCOBOD’s ongoing efforts to reform pricing structures, clear arrears, and introduce innovative financing models aim to stabilize the market and maintain Ghana’s significant role in global cocoa production.