Business News of Saturday, 8 July 2017
Government has announced that there will be no change in the producer price of cocoa for the 2017/2018 cocoa season despite the drop in the price of the commodity on the international market.
This follows a sharp drop in the international price of cocoa from an average of $2,900 recently to an average of $1,900, with the price volatility of the market ranging between $2,100 and 1,800 per tonne.
Chief Executive Officer (CEO) of the Ghana Cocoa Board (COCOBOD), Joseph Boahen Aidoo, who made this known, said the current producer price has been pegged at GH?7,600 on the basis of last year’s average free-on-board per tonne of cocoa sold at $2,900.
Speaking at an engagement with regional and district cocoa farmers in Kumasi, Mr. Aidoo said the drop had been driven by oversupply from Cote d’Ivoire, coupled with a fall in demand.
He revealed that there were fears the increase in production by Cote d’Ivoire to 1.6 million metric tonnes could worsen the existing problem, as the country prepares to raise its production in the sector.
“Now you will realize that about $1,000 has been lost already from the international market. It is imperative to say that we are doing forward sales and therefore the cocoa trees have already been sold,” he noted.
According to the COCOBOD CEO, the effect of the drop in price is that large crop beans will be sold at $1,900, which will further be discounted by 20 percent, indicating that the development would present challenges to the cocoa industry and the country’s economy next year.
“We have to sell our cocoa at lower price and then we have to decide whether to maintain the producer price, increase or reduce it. As we speak now, the producer price in Cote d’Ivoire and other neighbouring countries has been reduced, but we cannot do that,” he disclosed.
He added that Ghana has a minimum guaranteed price for cocoa farmers.
The COCOBOD boss said government might need GH?2 billion to purchase cocoa from the farmers in October 1, 2017, pointing out that the Cocoa Stabilization Fund only has an amount of GH?320 million.
Touching on fertilizer, Mr. Aidoo asserted that they hoped the new arrangement would have positive impact on production, adding that the last three years of free fertilizer programme accounted for Ghana’s low production of cocoa.
“The farmers say the free fertilizer never got to them, and that Ghana’s fertilizers not for sale were being used in Nigeria, Gabon and other neighbouring African countries. It means the free fertilizers were given to party people who were not cocoa farmers,” he declared.
He added that the current government was determined to make the farmers happy through various interventions, including hand pollination to increase production for the farmers.
“Some farmers produce two bags per hectre which should not be the case. At least 30 bags per hectre are acceptable and this is what we are committed to do for them,” the COCOBOD CEO indicated.
Nana Nicholas Cobbina, Western Regional chief cocoa farmer, praised government and the COCOBOD boss for their foresight and intervention programmes to increase yield.
He reiterated the farmers’ commitment to supporting government to achieve the new production target, noting that farmers stand to gain from increased production.