New Cocoa Price Set To Be Announced

Government is set to announce a new floor price for cocoa today and players in the sector have expressed varied opinions about the expected price. Farmers have since the announcement of the previous cocoa prices pushed for higher prices and today they are not certain if their prayers would be answered. Information reaching City & Business Guide indicates that there would be an upward adjustment in the price of the commodity. Prices of cocoa are determined by the Ministry of Finance and Economic Planning in conjunction with the Ghana Cocoa Board (COCOBOD), the regulator of the sector. For the just-ended 2010/2011 cocoa season, the government fixed the price at GH˘200 per a bag and $3,200 per tonne. Sixteen bags of cocoa make a tonne. At the beginning of the last season, a tonne of cocoa was selling at $3,200 on the world market but it declined to $2,600 but analysts believe the forces on the market would move the price upward. Cocoa prices are determined by the world market price and the exchange rate. Some leading members of Licensed Cocoa Buyers, who pleaded anonymity, told this paper that they would not be surprised if government reduces the prices. “A reduction would not be out of place but I think it would be fair to maintain prices with the hope that other sectors of economy would do better or the world prices will go up,” said a cocoa buyer, who thinks government would increase the current price beyond GH˘5 per bag. However, Tony Fofie, COCOBOD Chief Executive has told Reuters that the Board on its part recommended a “very marginal” increase in the prices paid to farmers. COCOBOD anticipates a new price of 3,216 cedis per tonne for the 2011/2012 cocoa season compared to 3,200 cedis for the last season. “This is the time we think we will have to manage the expectation of our farmers and let them appreciate the difficult position we are in due to the fact that the world market price is falling,” he said in an interview. “It is only a recommendation and the final decision would be taken by the government.