* Ghana raises producer price by a third
* Move aimed at fighting smuggling
* 2009-10 purchases drop 10 percent, hopes for recovery
(Updates with 2009-10 purchases figures)
By Kwasi Kpodo
ACCRA, Sept 28 (Reuters) - Ghana's cocoa regulator raised official cocoa prices by a third on Tuesday in an effort to stamp out smuggling that has slashed its official purchases volumes.
Prices for the 2010-11 season set to begin on Oct. 1 in the world's No. 2 grower will be 3,200 cedis ($2,238) per tonne, up from 2,400 cedis per tonne during the 2009-10 season, Finance Minister Kwabena Duffuor told a news conference.
The move was intended to discourage smuggling of cocoa to neighbouring West African states including top grower Ivory Coast, he said of a trend experts believe may have kept as much as 100,000 tonnes of cocoa off Ghana's books this year.
"The fact that they have made the price more competitive is a positive sign for domestic supply, and should stop some cross-border smuggling," said Sudakshina Unnikrishnan, commodities analyst at Barclays Capital.
She said it was unlikely to lead farmers to significantly boost production, however. "It's supportive for domestic supply, but it's not a game-changer," she said.
Ghana's official cocoa purchases totalled 632,024 tonnes during the 2009-10 season, down about 10 percent from the previous year, according to new Cocobod figures obtained by Reuters on Tuesday.
Finance Minister Duffuor said he expected purchases to recover to 700,000 tonnes in the coming season.
The lacklustre performance runs counter to Ghana's ambitious target of producing 1 million tonnes of cocoa per year by 2012, an amount that could allow it to rival Ivory Coast, whose output this year is running at around 1.2 million tonnes.
Benchmark cocoa futures for delivery in December traded around $2,820 per tonne in New York on Tuesday.
FARMERS MOTIVATED
Ghana's sector operates on a fixed-price basis whereas the liberalised Ivorian industry uses an indicative price system which is not binding and so its prices more closely track developments on the world market.
Farmers greeted the price hike warmly.
"We are happy about the bold decision by the government to increase the producer price and make it competitive with the indicative price of Cote d'Ivoire," said Nana Kwasi Ofori, a farmer and representative of central region growers.
"From what I see on the trees, more cocoa will come next year. The weather too is good and I believe we will get more than the 700,000 tonnes" he said.
Last week industry regulator Cocobod secured commitments worth $1.5 billion to fund purchases of cocoa beans for export in the 2010/11 season, according to the bank that was lead manager of the transaction.
That was 25 percent more than targeted as the facility -- which is used by Cocobod to finance purchases of beans -- was heavily oversubscribed.
Duffuor said Ghana was planning additional incentives to growers, who have often complained of low prices.
"To further reward hardworking farmers, the government has directed the Ghana Cocoa Board to work out and pay bonuses to farmers on the 2009/2010 main cocoa crop," Duffuor said.
(Reporting by Kwasi Kpodo; additional reporting by Daniel Magnowski in Dakar; editing by Mark John)
Source: Reuters
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