The first glimpse the general public got into this issue was about a week ago. This was brought to our attention when the government announced it was going to cut producer prices down for cocoa farmers in Ghana. After this, we saw and read news of keyboards costing upwards of 4,500 a piece (wonder what they keys are made of) and farmers angry about the price cut and salaries being cut etc. WOah! A lot went on this week and OPE is here to help you make sense of it all and how it affects you.
What the **ll is going on OPE?
This all began on the 14th of February 2026, when we heard of the government cutting the producer price for cocoa. What it means is that a bag of cocoa which was supposed to be GH¢3,228.75 per bag was now going to sell for to GH¢2,587 per bag. Hehe. What the heck? What? How? Why? Hold your horses. This is where it gets interesting.
How COCOBOD works
To understand the crisis, you first need to understand how Ghana sells cocoa. The Ghana Cocoa Board is the only entity legally allowed to export Ghana’s cocoa. Every bag that leaves this country goes through them. No farmer, no private company, nobody else.
Now, before a single farmer even harvests their cocoa, COCOBOD is already selling it internationally. How? Through something we call forward sales contracts. These are agreements signed with international buyers months or even a year in advance, locking in a price for cocoa that hasn’t been harvested yet. Now, the effect of this agreement is that if we agree to sell at $7,000 per tonne and the price falls to $4,000 later, we are protected. We already have an agreement in place. The Cocoa price for that season is already locked.
How they secure payment for farmers
The next issue is how to pay farmers when they deliver their cocoa throughout the season. You can’t keep them waiting while you sell all the cocoa before paying them. To solve this, COCOBOD needs a lot of cash ready. The answer, for over 30 years, was a syndicated loan. This means that the COCOBOD borrows over $1 billion every season from a group of international banks, promising to pay it back once the cocoa was sold.
Great! I mean everyone takes out loans for big projects. But we all know banks do not just give you loans for free. They need you to present a collateral. Another issue. So here’s where the COCOBOD gets smarter. They use the Forward sales contracts we talked about earlier as collateral. With this in place, the loan is secured.
How they buy Cocoa from farmers
With the loan secured, COCOBOD pushes money down to Licensed Buying Companies (LBCs). These are private firms that go into farming communities and buy cocoa directly from farmers at the government-fixed price.When the farmer delivers their cocoa harvest, LBC weights it, pays them from the COCOBOD secured loan, send the cocoa to COCOBOD, COCOBOD then ships it to international buyers, international buyers pay, COCOBOD repays the banks. That was the system. Clean, structured, and it worked untillllllllllllllllllllll.
This system worked well until the year of our Lord 2024. COCOBOD for the first time in 32 years failed to secure the syndicated loan. It happened again in 2025. Now LBCs were left to find their own financing. To fan the flames global cocoa prices crashed from $7,200 per tonne to around $4,100. This is below Ghana’s cost of getting cocoa from farms to port, which sits at about $6,300 to $6,400 per tonne. We also do not have any contract in place. This is a tough one.
Great insights