Ghana's cocoa regulator, COCOBOD, has raised the guaranteed price paid to farmers to 42,400 cedis per tonne, according to reports carried by UA.NEWS and MyJoyOnline. The increase comes as supply problems in the global cocoa market are expected to continue, Bloomberg.com reports.
Ghana, the world's second-largest cocoa producer, is also changing how it funds its annual crop purchases. COCOBOD's Cocoa Capital arm plans to raise GH¢16.3 billion locally for cocoa purchases, CitiNewsroom.com reports. Reuters reports the regulator is pitching a $1.4 billion domestic financing plan, a shift that follows the collapse of a foreign borrowing model Ghana had used for roughly three decades, according to africa.businessinsider.com.
The financing change matters because COCOBOD typically borrows ahead of each season to pay farmers at the guaranteed price. Moving that fundraising onshore signals that the syndicated offshore loan arrangement the country long relied on is no longer available on workable terms, africa.businessinsider.com reports.
Taken together, the higher farmgate price and the domestic borrowing push point to a sector under pressure on both the production and funding sides. Bloomberg.com frames the price increase as part of a broader picture in which market supply disruptions are set to linger, without specifying how long.
What to watch next: whether COCOBOD completes the GH¢16.3 billion local raise and the $1.4 billion financing plan, and whether the higher price changes farmer output in the coming season.
