How the Cocoa Sales Crisis Hit Ivory Coast and Ghana
LONDON, February 26 The world’s two largest cocoa producers, Ivory Coast and Ghana, which together supply nearly half of global cocoa, are facing a deepening sales crisis that has left farmers unpaid and warehouses overflowing with unsold beans.
The situation stems from a combination of strong global harvests, declining international cocoa prices, and weakening demand from chocolate manufacturers creating a perfect storm for the West African giants.
How Did the Crisis Begin?
Unlike many agricultural commodities traded freely on open markets, cocoa in Ivory Coast and Ghana operates under a regulated system.
Government-appointed cocoa regulators in both countries sell approximately 80% of their cocoa beans to global traders one year in advance. Based on these forward sales, authorities set a fixed farm-gate price at the start of each cocoa season in October.
Farmers are then required to sell their beans to local collectors at this fixed price. The collectors pass the cocoa on to licensed buyers, who in turn sell directly or indirectly to international traders.
Typically, the fixed price announced in October applies to the main crop season (October to March). A revised price is often introduced for the mid-crop season (April to September), which is generally considered lower in quality.
Where Things Went Wrong
At the start of the current season last October:
Ivory Coast set its main crop price at roughly $5,000 per metric ton
Ghana fixed its price at nearly $5,300 per metric ton
However, global cocoa futures have since plunged to about $3,100 per ton, losing nearly half their value this year alone.
This sharp decline created a major problem. International traders who purchased cocoa at the higher fixed prices would incur heavy losses if they resold at prevailing futures market rates. As a result, many traders halted purchases of Ivorian and Ghanaian beans.
The consequences have been severe:
Ghanaian farmers reported not receiving payment for beans delivered since November.
Similar payment delays have been reported in Ivory Coast.
Unsold cocoa stocks have piled up across warehouses, particularly in Ivory Coast.
Why Ivory Coast and Ghana Were Hit Harder
While other cocoa-producing nations felt the impact of falling global prices, Ivory Coast and Ghana’s fixed pricing system left them especially vulnerable.
Because prices were locked in at levels far above the global market rate, their cocoa became less attractive to buyers. In contrast, producers operating under more flexible pricing systems could adjust more quickly to market conditions.
Read alsoGhana Risks Losing Position as World’s Second-Largest Cocoa Producer Amid Rising Global Competition
What Are Governments Doing to Fix It?
Both governments have moved to stabilise the situation and restore confidence.
In Ivory Coast:
The government launched a $500 million emergency programme to purchase 100,000 tons of unsold main crop cocoa directly from farmers.
Authorities are preparing to cut the fixed farmer price by about one-third starting March 1, in an effort to align more closely with international market rates.
A new farmer price is expected to be announced by the end of February earlier than usual.
In Ghana:
On February 12, the cocoa regulator reduced the fixed farmer price by nearly one-third to approximately $3,580 per ton, after estimating about 50,000 tons of unsold cocoa stocks.
What This Means Going Forward
The crisis highlights the risks tied to advance pricing systems in volatile commodity markets. While fixed pricing provides farmers with income certainty at the start of the season, it can backfire when global prices fall sharply.
For Ghana and Ivory Coast, the coming months will be critical. Adjusting farmer prices, clearing stockpiles, and rebuilding trust with international buyers will determine how quickly the sector, and the livelihoods of millions of cocoa farmers, can recover.
As the backbone of both economies, cocoa’s stability is not just an agricultural issue; it is a national priority.
