The relative stability of the Ghana cedi is providing businesses with a buffer against a renewed rise in global food prices, helping to contain the local cost of imported wheat, rice, sugar and vegetable oils as international commodity markets face fresh supply pressures.

The exchange-rate cushion is particularly important for Ghana’s food-processing and import businesses, with the country projected to import about one million tonnes each of wheat and rice in the 2025/26 marketing year and spending more than US$2 billion annually on food imports.

World food prices increased 1.9 percent in August to their highest level since late 2022, according to the Food and Agriculture Organization (FAO), putting renewed pressure on countries heavily dependent on imported food and agricultural commodities.

The FAO Food Price Index averaged 133.3 points, up 2.5 percent from a year earlier, as major commodity groups recorded increases during the month. Cereal prices rose 2.2 percent to their highest level since May 2024.

International wheat prices increased 2.6 percent in August and were 15 percent higher than a year earlier, while maize prices rose 2.5 percent and rice gained 0.5 percent.

Sugar recorded one of the sharpest increases, rising 11.9 percent during the month as production concerns in Europe, Brazil and Asia tightened supply expectations. Vegetable oil prices also increased, adding to the cost pressure facing countries dependent on imported agricultural commodities.

The latest increases have not yet produced a similar rise in Ghana’s imported inflation, with movements in the cedi helping to absorb part of the external price pressure.

Bank of Ghana data show the cedi ended August at GH¢11.25 to the US dollar, compared with GH¢11.69 at the end of July, representing an appreciation of about 3.8 percent during the month. The currency subsequently traded at a weighted median rate of GH¢11.455 to the dollar on September 10.

During August, the cedi’s 3.8 percent end-period appreciation exceeded the monthly increases in international wheat, maize and rice prices of 2.6 percent, 2.5 percent and 0.5 percent respectively.

Although the movements do not offset each other mechanically because import contracts, purchase dates, freight, insurance, financing and other charges also determine landed prices, the comparison shows how exchange-rate stability prevented the international commodity increases from being compounded by currency depreciation.

An importer paying for a dollar-denominated shipment faces two potential sources of pressure — a rise in the international price of the commodity and an increase in the number of cedis required to buy the dollars needed to pay for it. The relative strength of the cedi has prevented those two pressures from occurring simultaneously on the same scale.

Ghana Statistical Service data show inflation on imported goods and services stood at 2.2 percent in August, compared with 6.1 percent for locally produced items. Headline inflation was five percent, while food inflation eased to three percent from 3.1 percent in July.

Locally produced goods and services accounted for 86.2 percent of total inflation, indicating that domestic costs rather than imported inflation remain the dominant source of price pressure in the economy.

The contrast has widened as international food markets move in the opposite direction. Ghana’s food prices fell 2.5 percent month-on-month in August even as the FAO global food benchmark increased 1.9 percent.

Flour millers, rice importers, edible-oil distributors, beverage manufacturers and other food processors are among businesses that stand to benefit from the exchange-rate cushion because a significant part of their imported raw materials and finished products is purchased in foreign currency.

A relatively stable cedi reduces the local-currency requirement for replenishing inventories and importing production inputs, even when the underlying dollar prices of commodities are increasing.

The risk from international markets remains significant because Ghana continues to depend heavily on imported staples and industrial food inputs.

Wheat represents one of the country’s largest exposures. Ghana does not produce the commodity commercially on a scale sufficient to meet demand and is projected to import about one million tonnes in the 2025/26 marketing year, up from an estimated 950,000 tonnes in the previous marketing year.

This leaves flour millers, bakeries, noodle producers and other food manufacturers exposed to the 15 percent year-on-year increase in international wheat prices. A sustained increase would eventually raise production costs even with a stable cedi, although exchange-rate stability can prevent the increase from being compounded by currency depreciation.

Rice imports are also projected at about one million tonnes in the 2025/26 marketing year, while government’s Feed Ghana Programmeestimated domestic production met only 29 percent of national demand in its 2024 baseline.

The programme is targeting 59 percent rice self-sufficiency in 2026, with production projected at about 485,564 tonnes as government seeks to reduce dependence on foreign supplies.

Ghana Statistical Service trade data show food-product imports were valued at GH¢38.95 billion in 2024, including GH¢1.98 billion of semi-milled and wholly milled rice and GH¢1.07 billion of broken rice.

Sugar and vegetable oils broaden the exposure beyond direct household consumption. Higher sugar prices can feed into costs for beverage producers, bakeries, confectionery manufacturers and other processors, while movements in palm and soybean oil prices affect restaurants, food manufacturers, distributors and households.

The timing of the latest global price increases is also important for businesses preparing for the final quarter of the year, when importers, retailers and food manufacturers typically begin building inventories for increased demand ahead of the festive period.

Companies placing new orders for wheat, rice, sugar, vegetable oils and other imported inputs will therefore be exposed to the prices prevailing on international markets as well as the exchange rate at which they can obtain foreign currency to settle those purchases.

Food manufacturers have consistently identified the exchange rate and the cost of imported raw materials among factors influencing production costs, making the cedi’s performance important to pricing decisions as businesses replenish stocks.

Further pressure could come from energy and freight costs. Higher fuel prices increase the cost of shipping food and agricultural inputs and can raise fertilizer, processing and domestic transportation expenses before imported products reach consumers.

FAO has also revised its 2026 global cereal production forecast down by about 3.4 million tonnes to 2.98 billion tonnes, with weather conditions and disruptions to Russian and Ukrainian exports weighing on the supply outlook. Black Sea trade disruptions, production concerns in Europe and uncertainty over maize yields have contributed to higher quotations.

The exchange-rate cushion is therefore buying Ghanaian importers some protection rather than eliminating the global price increase.

Continued exchange-rate stability could keep imported inflation relatively subdued despite firmer global commodity prices. A sustained rise in world food prices would still increase landed costs, but businesses would avoid the additional pressure created by currency depreciation.

A weaker cedi while international prices remain elevated would produce a different outcome, exposing manufacturers and importers to higher dollar prices for commodities and a higher local-currency cost of obtaining the dollars required to pay for them.