Ghana has virtually eliminated cocoa smuggling this season by maintaining prices closer to international rates, unlike last year when a $3,000 price gap triggered daily smuggling incidents, Dr Randy Abbey, Chief Executive of the Ghana Cocoa Board (COCOBOD), has revealed.

Speaking on Joy FM's Newsfile programme, Dr Abbey explained that border communities typically operate in two markets and choose whichever is more favourable, making price differentials the key driver of smuggling activity.

"Research shows that anytime there is a gap of more than $400, the incidence of smuggling is very high," Dr Abbey stated, adding that COCOBOD constantly monitors Ghana-Côte d'Ivoire pricing to manage this risk.

The COCOBOD boss painted a vivid picture of the 2023/24 season when Ghana was paying farmers $3,100 per tonne while spot prices in neighbouring countries exceeded $6,000 to $7,000.

"Every single day, we had an issue with smuggling," Dr Abbey recounted, describing how the massive price gap created such strong incentives that smugglers would come directly onto Ghanaian farms to purchase cocoa beans from farmers.

He revealed that smugglers offered farmers between $4,000 and $5,000 per tonne, eliminating the need for farmers to take the risk of smuggling themselves. The illegal trade became so brazen that smugglers used various vehicles, including four-wheel drives and even hospital ambulances, to transport beans across borders.

The situation became serious enough to warrant national security intervention, with regular meetings held to address the crisis.

This season, the dynamics have completely changed. While Ghana's current prices are still lower than international spot prices – with gaps ranging from $1,000 to $2,000 – the differential is now working in Ghana's favour by eliminating smuggling incentives.

Dr Abbey explained that although the price gap might theoretically support "reverse smuggling" where beans are brought into Ghana from neighbouring countries, this has not materialized due to liquidity challenges in the Ghanaian cocoa sector.

"Even those who intend to smuggle know that Ghana is not buying," he said, referring to COCOBOD's current cash flow constraints that have left some beans unpurchased.