Cocoa farmers in the world’s No.2 producer Ghana are hoarding beans in anticipation of higher prices, industry sources told Reuters, potentially squeezing supplies to a global cocoa market looking to recover from last season’s disastrous harvests.

While the scale of the up-country bean stocking was not clear, a dozen farmers, buyers and officials from state regulator Cocobod confirmed the practice, with some blaming it for a slowing of bean purchases.

“I have more than 300 bags, but I won’t sell,” said a cocoa farmer in south-central Ghana, who asked not to be named. “I will only sell after Christmas. We want to see if they will increase the price as they said.”

The sources all said that farmers were reacting to comments by Vice President Mahamudu Bawumia, who told supporters of the ruling New Patriotic Party four weeks ago that the government would raise prices for farmers.

Bawumia, who is running for the presidency in Dec. 7 elections, was speaking in Sefwi Wiaso in southwestern Ghana, one of the country’s biggest cocoa growing towns. He has since said his comments had been misunderstood.

Ghana lost more than a third of its 2023/24 cocoa output to smuggling, according to Cocobod officials, adding to woes that brought production to a more than two-decade low and helped send global cocoa prices to record highs.

In a bid to boost farmer incomes and deter smuggling, Ghana raised the fixed farmgate price by nearly 45% to 48,000 cedis, or just under $3,000, per metric ton for the 2024/25 season, which opened in September.

However, Ivory Coast – Ghana’s neighbour and the world’s biggest cocoa grower – raised its price to 1,800 CFA francs ($3.00) per kilogramme, just slightly above Ghana’s.

NO PRICE ADJUSTMENT

Local media quoted Bawumia as saying the government would bring the farmers’ price on par with Ivory Coast’s.

Speaking to Reuters on Friday, however, Bawumia said there would only be a price adjustment in the case of a “significant difference” between the two countries’ prices.

“As it is, there is no significant difference, so we are not adjusting prices,” he said.

Still, many farmers believe a price hike is on the way.

A district manager for one of the top five licensed cocoa buyers in Ghana told Reuters in the southeastern town of Suhum that purchases had slowed in October, citing farmers as saying they were keeping their beans because they heard prices would be increased.

Another senior buyer said some farmers, after hearing prices might be increased, had even asked that beans they’d already sold be returned.

Cocobod CEO Joseph Aidoo told local media on Monday that the farmgate price will be raised if the Ghanaian cedi currency depreciates, eroding farmers’ income.

However, Samuel Adimado, president of Ghana’s cocoa buyers’ association said the current price was optimal for farmers and would help Cocobod clear its debts.

“The question is, how long can you hoard? Once it’s not smuggled out, they (farmers) will eventually release it,” he said.

($1 = 600.2500 CFA francs)