By Toma Imirhe
A sustained and significant slide in global cocoa prices denominated in US dollars is heightening new concerns about the economic viability of Ghana’s recently downward revised cedi-denominated cocoa producer price, potentially eroding export competitiveness again and putting farmers income at risk once more. As at the last days of February the price of cocoa on the global market had fallen to US$3,060 per tonne, which is lower than Ghana’s new producer price of GHc41,392 per tonne, which translates to US$3,762.9 per tonne at an exchange rate of GHc11 to one US dollar. The current global price therefore is just four-fifths of Ghana’s newly downward revised producer price
This is even as local cocoa farmers are still vigorously protesting against the recent downward review, arguing that the President Mahama administration had promised them substantially higher farm gate prices prior to assuming office in January 2025. Indeed, the government had, in August last year increased the producer price to US$ 5,040 per tonne. But at that time the global price was over US$7,000 per tonne
Instructively however, cocoa futures have since slumped to levels not seen since late 2023, with benchmark contracts plunging more than 60% from last year’s highs amid improved West African harvests (in Ghana, Cote d’Ivoire and even Nigeria) and weakening global demand for chocolate and other cocoa derivatives. This decline has unfolded despite earlier forecasts pointing to tightening global balances, illustrating the volatility plaguing the commodity market.
Futures data show cocoa prices retreating sharply through early 2026, driven by supply recovery in key origins and subdued grindings in major consuming markets. Traders and analysts now caution that cocoa could remain in a soft price environment through the coming months, underscoring the risk that benchmark prices stay well below levels underpinning premiums paid under the current pricing structure in Ghana. Industry forecasts anticipate continued uncertainty, with potential intermittent rebounds but no strong bullish trend in the near term.
This global weakness has tangible knock-on effects for Ghana’s export ecosystem, which traditionally prices beans against international Free-On-Board (FOB) valuations in US dollars.
In August 2025, the Ghanaian government raised the producer price to US$5,040 per tonne for the 2025/26 crop season — a 62.6% jump from the prior US$3,100 level and designed to align farmer incomes with roughly 70% of the then-estimable FOB value. In cedi terms, this initially translated to about GH¢51,660 per tonne or GH¢3,228.75 per 64kg bag.
However, dramatic downward pressure on the world market and declining FOB benchmarks prompted a mid-season revision in February 2026, lowering the cedi price to GH¢41,392 per tonne, equivalent to around GH¢2,587 per bag. This adjustment reflects the realities of a weak global market and aims to make Ghana’s pricing more in line with international demand. The downward revision aimed to stop government’s losses from its offering farmers more than international buyers were willing to pay, a situation which ultimately stemmed demand for Ghanaian cocoa and consequently, payment for crops taken from farmers,
Finance Minister Dr. Cassiel Ato Forson stressed the revision was necessary to “restore confidence across the industry” and improve liquidity for Licensed Buying Companies (LBCs) that have struggled to reconcile earlier pricing with export proceeds. “The new rate is intended to stabilise the sector, strengthen its financial base, and secure improved outcomes for farmers,” he said at a recent press briefing announcing the latest price revision.
Complicating matters further has been the strength of the Ghanaian cedi against the US dollar in recent months. After years of steep depreciation, the cedi posted significant gains in 2025 — weakening the cedi value of cocoa exports when converted from the US dollar receipts common to global contracts. While a stronger local currency helps ease import costs and inflation, it inadvertently compresses the cedi equivalent of export revenues unless producer prices are adjusted accordingly.
Currency analysts suggest that although the cedi may retain relative strength in the short run — partly due to macroeconomic stabilisation efforts — the trajectory of the US dollar Ghanaian cedi exchange rate remains open to volatility, influenced by foreign exchange flows, commodity receipts, and fiscal dynamics. A weakening dollar could help Ghana’s exporters regain some pricing edge in local currency terms, but this cannot be relied upon as a sole dampener of the negative effects of falling US dollar cocoa prices on farmers cedi earnings.
With global cocoa buyers increasingly price-sensitive in a weak market, Ghana’s revised producer price is being closely scrutinised for its now faded competitiveness. Some market participants have argued that the lower adjusted cedi price has improved alignment with current international FOB levels, making Ghana’s beans more attractive to foreign buyers, but price developments since then have made Ghana’s pricing unviable again. Indeed, others caution that without a strong global price recovery or a price hedging strategy by Ghana, buyers may still gravitate to cheaper sellers or delay their purchases to exploit further price dips.
But with cocoa prices dropping further since Ghana’s recent downward review of producer prices, government will be increasingly pressed to do another downward price review to avoid having to pay farmers more than what it is getting from international buyers, or having the produce go unsold again.
Cocoa farmers themselves though may resist another downward price revision more stringently than they did the recent one though, even as another build-up of unsold produce – and consequent unpaid farmers – would simply bring back the cocoa sector crisis that government is only now striving to resolve sustainably.
Local industry bodies therefore urge a responsive pricing mechanism tied to transparently published FOB averages and FX rates, applicable as soon as practicable. “Automatic adjustment linked to current market and exchange data could enhance predictability for farmers and traders alike,” said an executive with a major Licensed Buying Company who chose to speak on condition of anonymity.
As the cocoa market navigates a turbulent period, Ghana confronts a delicate balancing act: sustaining farmer incomes via realistic producer prices while preserving export competitiveness in a soft global price environment
