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ACCRA, Oct 2 (Reuters) – Ghana, the world’s second-biggest cocoa producer, on Thursday raised the fixed farmgate price paid to cocoa farmers by more than 12% for the 2025/26 crop season, the second price increase this year.

Finance Minister Cassiel Ato Forson told a press briefing in Accra that cocoa farmers would receive 58,000 Ghana cedis ($4,640.00) a metric ton, up from the current 51,660 cedis, effective from Friday. The new price works out at 3,625 cedi per 64 kg bag.

The previous price, announced in August, was set using projected world cocoa prices and an assumed exchange rate, the finance minister said.

“Subsequently, we have seen some changes so it is important for us to review the producer price again,” Forson said.

The price is usually set only once a year.

Ghana’ increase follows a similar decision by Ivory Coast, the world’s top cocoa producer, which increased its farmgate price to a record 2,800 CFA francs ($5.05) per kilogram on Wednesday.

“Before yesterday we were far ahead and they tried to catch up,” Forson said. “I think we are competitive now, they announced their price yesterday and if you compare to our price today, we are competitive as we speak.”

Ghana and Ivory Coast, which together account for more than 60% of global cocoa production, have been facing their worst harvests in decades due to a range of factors including dry weather and black pod disease.

Authorities have been seeking to increase farmers’ incomes and deter smuggling, which led to Ghana losing approximately 160,000 tons of cocoa to illegal cross-border trade in the 2023/24 season, according to officials at the Ghana Cocoa Board (COCOBOD).

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This compounded sectoral woes that brought Ghana’s production to a more than two-decade low, helping send global cocoa prices to record highs.

“When the price of cocoa in a country is way below that of a neighbouring country then smuggling may occur,” COCOBOD spokesperson Jerome Kwaku Sam said.

“Reviewing the price by adding an additional 400 cedis will indeed help to curb smuggling,” he said.