Editorial: Appreciation Of The Cedi And Anticipated New Producer Price Of Cocoa

Ghana’s cocoa producer price, according to myjoyonline.com report, is expected to see a significant upward adjustment in dollar terms, ahead of the next crop season. The anticipated increase comes as part of efforts to align local prices with gains in the global cocoa market, which has seen record-high prices in recent months.

According to the report, the Ghana Cocoa Board (COCOBOD) has, however, raised concerns about the sharp appreciation of the Ghanaian cedi, saying it may affect the real earnings of farmers, despite the dollar hike.

The website quoted the Chief Executive Officer of COCOBOD, Dr Randy Abbey, as having acknowledged that while the price per ton is set to rise substantially in dollar terms, the relative strength of the cedi could dampen the expected benefits for cocoa farmers when converted to local currency.

“The truth is that we are convinced and it is going to happen. On the dollar side, we will see in its impact. Based on the strength of the cedi, in cedi terms, you may not see anything significant. What we are seeing now is a situation where global prices are high and that would normally translate into higher incomes for our farmers. But with the cedi appreciating sharply, the gains could be reduced when translated into Ghana cedi,” Dr Abbey explained.

Though no official producer price of cocoa has been announced, The Chronicle commends COCOBOD for conceiving the idea of increasing the price of the commodity in the local market. In recent years, production of cocoa has been going down in Ghana, which used to be the leading producer of the commodity in the world.

The situation has been exacerbated by the constant smuggling of the produce to neighbouring countries – Ivory Coast and Togo. About three years ago, the former Chief Executive of the COCOBOD, Joseph Boahen Aidoo, complained bitterly that almost all the cocoa produced in the Volta Region had been smuggled to Togo. But after the security agencies had turned their attention to the region, the smugglers devised a new strategy to bring the produce from other parts of the country and smuggle them through the same region to Togo.

Intelligence we have picked up indicate that cocoa produced in Eastern Region and other parts of the country are being smuggled through the Volta Lake, via the Volta Region to Togo. This smuggling business is obviously being motivated by differences in prices of the commodity in Ghana, Togo and Ivory Coast.

Though the National Investigation Bureau (NIB) has intensified its operations in the Volta Region to stop the smuggling, the best method, in our opinion, is the adjustment of the price to be above or at par with what pertains in the neighbouring countries.

This is why The Chronicle is happy that COCOBOD is going to adjust the producer price, but what Dr Randy Abbey failed to disclose to Ghanaians was whether what Ghana is going to offer her farmers will be higher than what both Togo and Ivory Coast are currently paying to their farmers. Since we are all selling the cocoa beans at the same world market, Ivory Coast and Togo shouldn’t be paying higher than what we offer our gallant farmers.

Unfortunate, this has been the problem, resulting in the continuous smuggling of the produce to these neighbouring countries. We believe Dr Randy Abbey and his team are aware of this and will do everything possible to ensure that the yet to be announced producer price in Ghana will be slightly higher than what both Togo and Ivory Coast are paying their farmers.

With regards to the fear that the producer price that is going to be announced may not be enough to the Ghanaian cocoa farmer due to the appreciation of the Cedi against the US Dollar, The Chronicle does not see why COCOBOD should panic over this development. It is instructive to note that the cedi is not only appreciating against the US dollar, but all the world major currencies including the CFA as well.

This means if the right producer price is announced, there will not be any motivation to smuggle the produce to the Francophone countries because the CFA equivalent these smugglers will get will obviously be whittled down when it is changed into Ghana Cedis.

The appreciation of the cedi is good news that every fair minded Ghanaian should be happy with and not the other way round. We insist that the right producer price and stable Cedi will be enough to demotivate the smugglers and also make the farmers very happy here in Ghana.

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