Finance Ministry introduces FOB-based cocoa pricing reform to stabilise industry

The Ministry of Finance has indicated a reform in the producer price determination mechanism aimed at enhancing efficiency and financial viability within Ghana’s cocoa industry.

Central to these efforts is the introduction of a new pricing system based on Free-on-Board (FOB) prices.

This reform seeks to better align local cocoa prices with global market fluctuations, thereby reducing financial shocks to COCOBOD.

Speaking at the first Quarterly Economic Roundtable, the Director-Economic Strategy and Research Division, Ministry of Finance,  Dr. Alhassan Iddrisu, said the domestic cocoa industry is witnessing encouraging results from ongoing reforms.

“That’s the way to go, so when there are volatilities in the prices they are reflected immediately into the pricing regime – reducing any shock to the books of COCOBOD,” Dr. Iddrisu explained.

He also indicated that another key reform, which is COCOBOD’s phasing out of road construction activities, is showing positive outcomes.

“The consensus is that there’s a Ministry of Roads and the ministry is a better place to do some roads than COCOBOD itself”.

This shift has already led to significant cost reductions, with Dr. Iddrisu noting: “The huge COCOBOD Roads expenditures that were hitting the books of COCOBOD have been rationalised and reduced significantly.”

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