Minimum Producer Prices for Oil Palm Fruits and Rubber annouced.

As delivered.

Honourable Regional Minister, District Chief Executives, Members of the Board of Tree Crops Development Authority, Oil Palm and Rubber Actors, (Farmers, Aggregators, Processors, Exporters), Regional Agric. Director, invited Guests, Members of the Media, Distinguished Ladies and gentlemen, all other protocols observed:

May I humbly remind us that Tree Crops Development Authority (TCDA) is a legal institution established by an act of Parliament to regulate and develop in a sustainable environment; the production, processing, pricing, and marketing of six tree crops namely: Oil Palm, Rubber, Shea, Coconut, Cashew, and Mango. The Authority is therefore leading the agenda for the diversification of Ghana's agriculture by putting in place policies and programs to guide research, production, processing, pricing, and marketing of the six (6) stated tree crops with enormous agricultural, economic, export and forex earning potential for Ghana.

Since its inauguration by His Excellency, The President of Ghana, Nana Addo-Dankwa Akuffo Addo, on 29^th September 2020, the Authority has achieved the following:

1. supplied freely to farmers, three million seven hundred elite seedlings of Coconut, Oil Palm, Rubber, Mango, Shea and Cashew.

2. developed and launched a five-year strategic framework (2022–2027) with the goal to improve policy and regulatory environments conducive to leverage both public and private sector investments in order to stimulate inclusive and sustainable growth in the tree crop sub-sector.

3. established a digital framework for traceable supply chain and sustainable financing mechanisms with the aim to enhance the operational capacity of TCDA and the value chain actors of the six tree crops.

4. Developed pricing mechanisms for cashew, oil palm, and rubber with the objective of incentivizing producers to sustainably increase production.

Ladies and Gentlemen, permit me to reiterate that, the business for today, is to announce the maiden, monthly Minimum Producer Price for Oil Palm Fresh Fruits Bunch (FFB) and Raw Rubber (Cup-lumps).

In no particular order, I begin with Oil Palm.

THE MINIMUM PRODUCER PRICE FOR FFB

The model sets the following parameters to arrive at the minimum producer price as follows:

1. The average price of Crude Palm Oil (CPO) and Crude Palm Kernel Oil (CPKO) sourced from Reuters from the 26th of the previous month to the 25th of the current month or the next trading day if 25th falls on a holiday or a weekend.

2. The Cedi to Dollar exchange rate is sourced from the Bank of Ghana (BoG). It is the average of BoG’s Interbank Exchange Rate for the same period as above).

3. 0.79 % of Palm Kennel Oil (PKO) price from Reuters is considered in the price of the FFB.

4. Miller margin is set by Actors @ 9% of the CPO price.

5. Aggregation and transport of fruits is set by Actors @ 3.5% of the CPO price.

6. Average Oil Extraction rate (OER) for CPO agreed upon by Actors is 18%.

7. The pricing mechanism also provides room for farmers to obtain a premium for the quality of FFB produced. And finally,

8. The mechanism provides TCDA with a levy of 0.25% of the CPO price to support developmental activities of the Oil Palm Industry.

From 26^th November to 25^th December 2022, the variable parameters of the pricing formula are:

1. Average CPO/ton = $ 1021.75
2. Average PKO/ton = $ 1,004.25
3. Average interbank exchange rate = $1.0000:GH₵10.1467

Considering all the parameters above the Minimum Producer Price per tonne of FFB for the month of January 2023 is GHȻ 1,252. 92.

Ladies and Gentlemen, may I continue with the,

Minimum Producer Price for Rubber Cup-lumps

The mechanism for pricing Cup-lumps also sets the following parameters to arrive at the minimum farm gate price as follows:

1. The average international price of Technically Specified Rubber (TSR) is sourced from the Singapore Commodity Market (SICOM) from the 1^ST Trading Day of the month to the last Trading Day of the same month, and this has been agreed upon by all Actors and Stakeholders in the Rubber industry and the TCDA.

2. The average of BoG’s daily interbank exchange rate is also aggregated from the first working day of the month to the last working day of the month and the average for the whole period is what is used in the pricing formula.

3. The FOB price to the farmer is 63% and the Standard Dry Rubber Content (DRC) is fixed at 58%.

4. This mechanism also provides TCDA with a levy of 0.03% to support the developmental activities of the sector.

1. The average SICOM price for 1^st to 30 December 2022 is $ 1.3413 per kilo, and
2. The average BoG interbank exchange rate for the same period is $1.0000: GHȻ 10.0347.

Imputing these figures into the pricing formula,

The Minimum Producer Price for Raw Rubber Cup-lumps for the month of January, is GHȻ 4.9167 per Kilogram.

Ladies and Gentlemen, it is very important to note that, these formulae were developed by the TCDA together with various value chain Actors of Oil Palm, and the Rubber industry in Ghana, following best and sustainable international practices.  

THANK YOU.