Cocoa price cuts painful but necessary – COCOBOD CEO
The Chief Executive Officer of COCOBOD, Dr. Ransford Abbey, has defended the recent cocoa price cuts, calling it a painful but necessary decision to help sustain the domestic cocoa industry.
According to him, the current administration has always prioritized the welfare of cocoa farmers in making decisions that affect the agriculture sector.
Speaking at a ceremony in Accra on Wednesday, to honor the achievements of 3 cocoa farmers at the Cacao of Excellence Awards in the Netherlands, Dr. Randy Abbey explained that government only implemented the price cuts after carefully evaluating the global cocoa market, especially in light of the recent drops in international cocoa prices.
“In taking this decision, we have been guided by the need to strike a careful balance between providing immediate support to our farmers and ensuring that the cocoa industry remains resilient and sustainable over the long term,” he stated.
Dr. Abbey highlighted that although the government fulfilled its promise to give farmers 70% of the Free-On-Board (FOB) price, the current market conditions have put considerable financial pressure on the entire cocoa value chain, adding that COCOBOD and the government have taken significant steps to absorb some costs to in order to support farmers and maintain relative stability in producer prices.
“These reforms are part of a broader strategy to reposition the cocoa sector to respond more effectively to changing global market dynamics, while ensuring that our farmers continue to receive fair and sustainable returns,” he remarked.
On the financial outlook for the cocoa sector, Dr. Randy Abbey stressed that the current COCOBOD management is committed responsible financial management, “especially with our existing obligations from previous market interventions.” While acknowledging that such external interventions are critical in supporting farmers, they could place “too much pressure” on the cocoa sector.
He revealed that COCOBOD is developing new pricing and financing models designed to enhance the sector’s resilience and cushion farmers against global price fluctuations.
The global cocoa market is currently navigating a period of high volatility, forcing major price corrections across the world’s top producers.
Earlier last month, the government adjusted the producer price of cocoa, reducing it by 28% from GHC3,625 to about GHC2,587.
Ivory Coast, the world’s largest producer, implemented a nearly 60% reduction in its farmgate price effective March 1, dropping prices from 2,800 CFA francs per kilogram to between 800 and 1,200 CFA francs, to “align with global market realities.”
This, in effect, places Ghana’s GH¢2,587 per bag significantly ahead of the rate in Ivory Coast, despite the reduction in February.
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