October 1, 2016 / 3:24 PM / 10 months ago

UPDATE 2-Ghana sets 2016-17 season farmgate cocoa price at $1,914 per tonne

3 Min Read

(Updates with detail, context)

By Matthew Mpoke Bigg

TEPA, Ghana, Oct 1 (Reuters) - Ghana will pay cocoa farmers 7,600 cedis ($1,914) per tonne of beans during the 2016-17 season, nearly 12 percent more than last crop year, deputy finance minister Cassiel Ato Forson said on Saturday as he announced the start of the new season.

The new price works out at 475 cedis per 64-kg bag, the main unit in which Ghana's hundreds of thousands of cocoa farmers sell the crop for export. Cocoa regulator Cocobod is targeting production of 850,000-900,000 tonnes this season.

Ghana is the world's second-biggest cocoa producer behind neighbouring Ivory Coast and cocoa is Ghana's most important export crop, earning vital foreign exchange for a country where economic growth has slowed sharply since 2014.

"This change (the new price) is higher than ... our major competitor, our neighbour Ivory Coast," Forson told a gathering, or durbar of hundreds of traditional chiefs and cocoa farmers in the town of Tepa in the Ashanti region.

The purchase price is crucial to deter smuggling into Ivory Coast, which on Wednesday set its producer price at the slightly lower level of $1.88 per kg.

Presidential Election

The durbar took place two months before an election in which President John Mahama faces a stiff challenge from opposition leader Nana Akufo-Addo as he runs for a second and final term.

Forson and Cocobod chief executive Stephen Opuni used the occasion to rally support ahead of the election, appealing to cocoa farmers who reside in some of Ghana's most tightly-contested regions.

Forson said average production and the price paid to farmers had risen more since the ruling National Democratic Congress took power in 2009 than during the previous eight years when the New Patriotic Party (NPP) was in charge.

"By the time John Dramani Mahama completes his second term a lot of roads will have been constructed in the cocoa sector," Opuni said. Improving infrastructure is one of Mahama's key campaign themes.

The NPP says only it can restore sustainable growth after four years under Mahama during which the government was forced to begin an aid deal with the International Monetary Fund to restore economic stability.

The cocoa year runs from October to September and the crop year that has just ended was hampered by an unusually long dry season and fell short of the government's target of 850,000.

A final production figure has yet to be announced though it will be more than the disappointing output of 740,000 tonnes in the previous season, officials said. One cocoa official said a count two weeks ago put total purchases at 776,000 tonnes. ($1 = 3.9715 Ghana cedis) (Additional reporting by Kwasi Kpodo in Accra; Editing by Helen Popper)

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