Ghana followed Ivory Coast to raise the price it pays farmers for their produce after cocoa futures soared.

The world’s second-biggest producer of the chocolate ingredient increased the farmgate price for cocoa beans 58 per cent to 33,120 cedis (US$2,481) per ton for the rest of the 2023-24 season, Ghana Cocoa Board said in a statement. That translates into 2,070 cedis per bag of 64 kilograms, it said.

Cocoa futures prices have more than doubled this year to cross US$10,000 a ton for the first time, before currently edging below. The surge was spurred by a drop in output in top producer Ivory Coast and neighboring Ghana, caused by a mix of adverse weather, disease and a shortage of fertilizer, setting up the global market for a third straight year of shortages.

“The increase in the producer price of cocoa has become necessary to enhance the income of farmers,” the industry regulator also known as Cocobod said. It is also in response to “rising prices of cocoa on the international market.”

This is the first time that the West African nation raised farmers’ pay twice during the main crop season, which started last September and ends on Jun 30. Ghana already raised the rate 63.5 per cent at the beginning of the period. It comes after Ivory Coast on Apr 2 hiked prices 50 per cent to 1,500 CFA francs (US$2.48) per kilogram for its mid-crop, the smaller of two annual harvests that runs from this month and ends on Sep 30.

Higher farmgate prices may help ease the global cocoa shortage as growers now have more incentive to hand over beans for processing and export. There’s been concern some are holding back deliveries in the hope of higher pay. The increase may also spur investment in farms where trees are aging and vulnerable to disease.

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Still, the payments remain well below levels on the world market and more will be needed to buck the legacy of low farmer remuneration in West Africa. New York futures rose on Friday after three days of declines by 3.5 per cent to US$9,795 per ton. BLOOMBERG