Ghana raises cocoa prices by over 50%

Ghana’s president ordered an increase in farmgate cocoa prices by 58% amid a drop in output due to climate change.

Ghana is the world’s second largest cocoa producer with 15% of global output of the key ingredient for chocolate production.

“The increase in the producer price of cocoa has become necessary to enhance the income of cocoa farmers in line with the vision of the NPP government and in response to the rising prices of cocoa on the international market,” according to industry regulator Cocobod.

In addition to the devastating heatwave, Cocoa farmers have struggled with two crop diseases that ditched production. The black pod disease and cacao swollen chute virus have hit cacao trees in recent quarters.

The Ghana price hike would trigger similar moves in other major cocoa producing markets. This would have repercussions on chocolate prices already on an upward trend as inventories empty.

In the US, end consumers are already feeling the heat after an increase in chocolate prices on store shelves by more than 10%, while in the UK prices increased by 12.6%.

Prices of cocoa skyrocketed to a record 10,000 dollars per ton last week. They are poised to further surge amid a disastrous output in west Africa.

Besides climate change and plant diseases, the surge in cocoa prices is also blamed on other factors such as rising price of fertilizers, deforestation, and illegal mining practices that degrade land.