The world’s two largest cocoa producers are simultaneously cutting what they pay their farmers and struggling to clear a growing backlog of unsold beans, with Ivory Coast announcing on Thursday that it will reduce its farmgate price by roughly one-third from March 1, following Ghana’s own price cut earlier this month as the global market continues to trade near three-year lows.
Reuters reported, citing four government and regulator sources, that Ivory Coast’s Conseil du Café-Cacao (CCC) has won approval to bring forward the start of its mid-crop season for the first time in the country’s history, reclassifying cocoa produced from March as mid-crop rather than main crop. That change allows the regulator to set a sharply lower farmgate price of between 800 and 1,000 West African CFA francs per kilogram for that production, compared with the current main-crop price of 2,800 CFA francs per kilogram, a cut of between 64 and 71 percent. Ivory Coast’s government is simultaneously paying subsidies of between 1,900 and 2,200 CFA francs per kilogram to bridge the gap between the guaranteed farmgate price and the price international buyers are willing to pay. “Every day, prices continue to fall despite our efforts. We must be realistic and adapt like our neighbours in Ghana,” one government source told Reuters.
The development follows Ghana’s February 12 decision to cut its own farmgate price by nearly one-third, from GH¢3,625 to GH¢2,587 per 64-kilogram bag, after global cocoa futures crashed from nearly $13,000 per tonne at their 2024 peak to approximately $3,100 per tonne today. The collapse, driven by bumper West African harvests and sharply reduced demand from chocolate manufacturers who have been shrinking bar sizes and substituting cocoa butter with alternative fats, has left both countries’ pricing frameworks — set when futures traded far higher — severely out of alignment with reality.
The immediate human cost of that misalignment is acute. In Ghana, the Licensed Cocoa Buyers Association has reported total debts of between GH¢7 billion and GH¢8 billion to commercial banks, equivalent to between $650 million and $750 million, alongside an additional GH¢2.2 billion to GH¢2.5 billion owed directly to farmers who have not been paid for beans already delivered. Licensed buyers have already delivered approximately 580,000 tonnes to the Ghana Cocoa Board (COCOBOD) and are awaiting payment, with a further 70,000 tonnes still sitting in fields. Banks are restructuring their obligations, but the episode has exposed severe credit stress across the entire Ghanaian cocoa supply chain and has deepened calls for structural reform of a system that critics say left the country dangerously exposed to a price shock of exactly this magnitude.
Both governments have said they will retain the $400 per tonne Living Income Differential (LID), jointly introduced with the cocoa industry in 2020 to guarantee farmers a minimum above world market prices. However, with the farmgate prices themselves falling sharply below previous levels, the effective income received by farmers in both countries remains dramatically lower than at the start of the 2025-2026 season.
Against that backdrop, five of the world’s largest chocolate manufacturers Nestlé, Lindt, Mars, Mondelēz, and Hershey this week announced the launch of the TogetherCocoa Foundation in Geneva. The initiative will coordinate living income and sustainability programmes across Ivory Coast and Ghana, signalling that manufacturers see structured industry-wide collaboration rather than individual sourcing strategies as the only viable long-term response to the supply-chain fragility the current crisis has exposed.
With cocoa futures down approximately 31 percent in the past month alone and inventories building across both West African producers, analysts at CocoaRadar said this week they expected continued range-bound to lower pricing in the near term, with no sustained recovery likely until global inventories show a visible drawdown and physical demand from processors improves materially.
