Some of Ghana’s cocoa farmers have not been paid, putting investment in the next harvest at risk, as international traders resist making large upfront payments under a new purchasing model, three sources familiar with the situation said.
The revamped system, introduced for the 2024/25 season, shifted the burden of pre-financing cocoa purchases from the Ghana Cocoa Board (COCOBOD) to international traders.
But following better-than-expected output this season, traders have baulked at paying deposits of at least 60% of the value of forward contracts at the start of the season, leaving the world’s second-largest cocoa producer with a sizeable stockpile, the sources said, without providing figures.
COCOBOD did not respond to requests for comment.
Prices fall, standoff deepens
A global cocoa surplus has pushed prices down by about 20% so far this year after a 50% fall last year. Prices had surged 160% in 2024.
Under Ghana’s marketing system, farmers sell beans to licensed buying companies (LBCs), which sell to COCOBOD. The regulator then sells to international traders through its marketing arm.
A source at an LBC said the fall in international prices had made it harder for COCOBOD to persuade traders to make advance payments to secure supplies. Another LBC source said the farmgate price set annually by the regulator was no longer viable.
In October, Ghana set the 2024/25 farmgate price at 58,000 Ghana cedis per metric ton, up 12%. International prices are trading at around $4,700 a ton.
Overhaul of long-standing system
For three decades, COCOBOD financed purchases through annual syndicated loans, disbursing funds to LBCs to buy beans from farmers for onward sale. The model was revised after COCOBOD struggled to raise financing, but the sources said the new system is also under strain.
A third LBC source said Ghanaian cocoa is overpriced relative to global markets, making it untenable to buy at farmgate prices that imply selling at a loss.
All sources requested anonymity as they were not authorised to speak publicly.
Stevenson Anane Boateng, president of the Ghana National Association of Cocoa Farmers, said on local radio on Saturday that some farmers had not been paid since November, without giving numbers.
Theophilus Tamakloe, vice president of the Ghana Cooperative Cocoa Farmers Association, told Reuters payment delays threaten farmers’ ability to service bank loans and carry out January maintenance such as pruning and fertiliser application.
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