Cocoa prices ended last week’s rally upon news that Ghana’s Cocoa Board had cut its 2024/25 cocoa production forecast to 600,000 metric tonne from a December estimate of 617,500.
The outlook for smaller cocoa supplies from Ghana, the world’s second-largest cocoa producer, is pushing prices sharply higher.
The ongoing crop season in Ghana has been affected by several factors. One is adverse weather conditions such as unpredictable rainfall patterns, prolonged dry spells and climate change which have negatively impacted cocoa yields.
Another is swollen shoot virus disease which continues to spread in cocoa-growing regions, reducing productivity and forcing the destruction of infected trees. Rampant illegal mining activities have destroyed fertile cocoa farmlands, particularly in key regions like Western and Ashanti.
Many cocoa trees in Ghana are old and less productive, with insufficient rehabilitation and replanting efforts to offset declining yields. Rising costs of fertilizers, pesticides, and labor have constrained farmers’ ability to maintain optimal production levels.
Economic challenges particularly inflation, and last year’s currency depreciation as well as financial constraints have affected COCOBOD’s ability to provide adequate support to farmers.
However, cocoa smuggling to neighboring countries like Côte d’Ivoire and Togo due to price disparities have reduced official production figures.
Higher prices have been offered in Côte d’Ivoire and Togo for much of the season – prior to the recent sharp appreciation of the cedi – as Ghana’s farm gate price of GH¢33,120 per tonne was lower than prices in Côte d’Ivoire and Togo, where smuggling is rampant.
Consequently, farmers and middlemen have illegally diverted cocoa across borders, reducing the volume available for official COCOBOD purchases. As a result, COCOBOD’s declared production figures have dropped, even if actual output is higher.
COCOBOD itself has been unable to secure its annual syndicated loan for this crop season, the most recent being just US$800 million for the previous crop season down from the usual US$1.2–1.5 billion.
With limited funds, COCOBOD cannot purchase the full harvest, forcing farmers to either sell to smugglers who pay upfront in cash, hoard beans, hoping for better prices later, or shift to illegal mining (galamsey) for quicker income COCOBOD is implementing measures like disease control, farmer support programs, and replanting initiatives, but these take time to yield results.
Ghana’s reduced output, combined with similar challenges in Côte d’Ivoire, could tighten global cocoa supplies further.
Cocoa prices have risen also in part due to concerns about tighter cocoa supplies from the Ivory Coast. Government data released last week showed that Ivory Coast farmers shipped 1.679 million metric tonnes of cocoa to ports this crop season from October 1 2024 to June 22 2025, up 6.9% from last year but down from the much larger 35% increase seen in December.
There are reports that heavy rain in the Ivory Coast is keeping cocoa growers off their farms and is disrupting the ongoing mid-crop cocoa harvest.
Cocoa prices had been under pressure over the past couple of weeks, with New York market cocoa posting a two month low a fortnight ago and London cocoa posting a two and a half month low.
Recent rain in West Africa is expected to benefit the region’s cocoa crops however and has limited last week’s surge in cocoa prices.
By Toma Imirhe
