Chocflation: Ghana mulls 100% cocoa price hike amid perfect storm of multiple crises

Ghana, the world’s second-largest cocoa producer, considers doubling farmgate price of the crop to combat smuggling amid a global shortage, as the country’s share of the whole sale market price shrinks to 16% from 44% in mid last year.
The Ghana Cocoa Board and the country’s government are reportedly muling a significant increase — potentially by 50-100% — in the farmgate price paid to cocoa farmers, aiming to curb the smuggling of cocoa beans to neighboring countries, where farmers can fetch higher prices. If approved by the government, this would follow a previous 63.5% increase to 20,928 cedis ($1,567) a ton at the start of the main crop season in September. Ghana’s decision to increase the farmgate cocoa price may also be influenced by Ivory Coast’s recent 50% pay hike for its cocoa farmers amidst a global shortage of the crop.
Cocoa futures in New York have more than doubled this year, driven by a global cocoa shortage, exacerbated by adverse weather conditions and disease affecting African output. These soaring prices have significantly shrunk the share of the wholesale market price received by Ghanaian farmers to 16% from 44% seven months ago. Long the world’s undisputed cocoa powerhouses, accounting for more than 60% of global supply, Ghana and its neighbor Ivory Coast are both facing catastrophic harvests this season, driven by a perfect storm of challenges, including climate change, rampant illegal gold mining, sector mismanagement and rapidly spreading disease is to blame.