According to a report by Bloomberg, after the implementation of the $400 per metric ton premium on future prices for the 2020-21 harvest, cocoa farmers in Ghana will earn more for a bag of beans.
Growers of cocoa beans in the world’s second-largest producer of the crop will receive GHC625 ($108) per 64-kilogram bag, or GHC10,000 per ton, for the harvest season that begins October 1 and continues through September 2021 after the so-called Living-Income Differential (LID) was charged on the beans.
The new price per bag is compared to the GHC515 per bag and GHC8,240 per ton in the current season that ends September 30.
Bloomberg further noted that Ghana and neighboring Ivory Coast, the world’s largest grower of the crop, announced in July 2019 that the LID would raise the pay of farmers.
The pricing mechanism received mixed reactions from traders as the premium couldn’t be hedged.
The farm gate price increase for Ghana’s estimated 800,000 cocoa farmers may boost President Nana Akufo-Addo’s chances of re-election in December’s election.