Cocoa farmers to receive GHC2,587 per bag as government cuts producer price amid global slump

Government resets pricing formula after sharp drop in world cocoa prices, reduces farmer payment by GH¢1,038 per bag

The government has slashed the producer price of cocoa to GH¢41,392 per tonne and GH¢2,587 per bag for the remainder of the 2025/2026 crop season, citing a dramatic decline in global market prices and mounting liquidity pressures within the sector.

Announcing the decision at a press conference in Accra on Thursday, Finance Minister Dr Cassiel Ato Forson said the adjustment, though difficult, was necessary to align Ghana’s cocoa pricing with international market realities while safeguarding farmer incomes as much as possible.

The 2025/2026 cocoa season commenced in August 2025 with a producer price of GH¢51,660 per tonne, calculated at 70 per cent of a gross free-on-board (FOB) price of US$7,200 per tonne, using an exchange rate of GH¢10.25 to the dollar.

Following Côte d’Ivoire’s announcement of a higher producer price in October 2025 and shifts in the exchange rate, Ghana revised its farm gate price upward to GH¢58,000 per tonne—equivalent to GH¢3,625 per bag—to mitigate smuggling risks.

“The decision by the Producer Price Review Committee to increase the producer price of cocoa made Ghana’s farm gate price competitive and stemmed the potential smuggling of our cocoa beans,” Dr Forson recalled.

However, from October 2025, the global cocoa market began a sharp downturn. Prices have since fallen from an average of US$7,200 per tonne to approximately US$4,100 per tonne, leaving Ghana’s cocoa overpriced relative to competitors and creating severe cash flow constraints for COCOBOD.

In response, the Producer Price Review Committee, chaired by the Finance Minister, convened to reassess the producer price structure for the remainder of the season.

90 per cent export share maintained

“In order to cushion the farmer, the PPRC has recommended that the farmer be paid 90 per cent of the achieved gross FOB of US$4,200 per tonne to mitigate the adverse impact on the farmer as a result of the fall in the world market price,” Dr Forson announced.

The new rate of GH¢41,392 per tonne translates to GH¢2,587 per 64-kilogramme bag—a reduction of GH¢16,608 per tonne and GH¢1,038 per bag from the October 2025 rate.

Dr Forson emphasised that the adjustment was unavoidable to ensure sector viability, enable immediate liquidity for expedited farmer payments, and guarantee the sustainability of Ghana’s cocoa industry.

He assured farmers that despite the reduction, government had opted to maintain a high producer share of export earnings at 90 per cent of the achieved gross FOB price, significantly above the statutory minimum of 70 per cent.

Acknowledgment of farmer sacrifice

The Finance Minister acknowledged the strain that price volatility has placed on cocoa growers but expressed confidence in broader reform efforts.

“Government wishes to convey its sincere appreciation to the Ghanaian cocoa farmer and all stakeholders for their forbearance and sacrifice over the years,” he said.

“I wish to assure them that these reforms will protect the interest of the cocoa farmer and the cocoa sector. In fact, we strongly believe this will transform the industry.”

The price revision takes immediate effect for the remainder of the 2025/2026 crop season.