Key points:

  • Global cocoa prices have risen sharply since early 2024 due to crop shortages in Ghana and Ivory Coast.
  • Despite the rise in prices, the fixed purchase price for cocoa in Ghana has not been increased. Farmers are forced to sell cocoa to smugglers due to low prices and delays in payments.
  • Illegal cocoa exports cast doubt on production forecasts for next season.

Due to low prices and delays in payments, Ghanaian farmers are forced to look for alternative ways to sell cocoa by selling it to smugglers. The scheme involves the illegal export of produce from border areas, casting doubt on production forecasts for the next season.

Without addressing financial constraints and closing the gap between the price set in Ghana and the amounts paid by traders, the situation of already struggling farmers could worsen further. This risks negatively impacting cocoa production in Ghana, the world’s second-largest producer.

Global rise in cocoa prices and thriving smuggling

Since the beginning of 2024, there has been a sharp increase in world cocoa prices. The reason for this was a crop shortage in Ghana and Côte d’Ivoire, the largest producers of cocoa beans in the world. Adverse weather conditions, disease and illegal mining led to a catastrophic decline in production.

Although global cocoa prices are now roughly double what they were a year ago, the fixed price at which the Ghanaian government purchases cocoa from farmers has not been increased. This has created favorable conditions for smugglers operating in neighboring Togo, as well as for security forces who buy cocoa at higher prices.

Increasing the fixed price in Ghana is not practical at this time as it would mean accepting a significant reduction in the harvest, which has occurred after this season’s cocoa was already sold at lower prices.

Ghanaian cocoa smuggling continues to thrive despite rising prices

In April 2024, prices for cocoa purchased from farmers were increased by almost 60%. This was done, among other things, to curb the growth of illegal trade in cocoa beans.

However, local buyers say they cannot compete with smugglers who are willing to pay more than double the official price, regardless of the quality of the product.

Since January 2024, not a single bag of cocoa produced in the Volta and Oti regions has been purchased by licensed buyers. According to them, all the cocoa from these regions was smuggled out and also became a conduit for the illegal export of beans from other regions of Ghana.

One licensed buyer in eastern Ghana, who spoke on condition of anonymity for fear of reprisals from criminal gangs, said cocoa smuggling had increased significantly over the past three seasons. While he was able to purchase 28,000 bags of cocoa in the 2020/21 season, he was only able to purchase 870 this season.

At the same time, gangs of smugglers are becoming more and more inventive. In some cases, they are financed and coordinated by foreigners from Lebanon, China, France and Russia based in Togo.