The Ghana Cocoa Board (COCOBOD), the state regulator for the cocoa industry, has announced that purchases for the 2023/24 main crop season will cease at the close of business on Thursday, June 6, 202
In a press statement issued by the Public Affairs Department of COCOBOD, it was explained that to assist the Licensed Buying Companies (LBCs) in obtaining the final returns from up-country centers, returns on the declared purchases will be accepted until 4:00 pm on Thursday, June 13, 2024.
Sources indicate that the regulator postponed the delivery of at least 150,000 to 250,000 tons of cocoa until the next season due to a lack of beans, signaling how a supply crunch is affecting the global market.
COCOBOD, according to sources, is in discussions with major traders to roll over the delivery until sometime during the season that starts in October.
The beans are supposed to be delivered during the main harvest that will end in the coming months, and some traders are asking for a significant discount for the delay, according to two sources.
Ghana has faced difficulties fulfilling its contracts recently due to lower output, forcing it to roll over deliveries and putting more strain on the global market.
The country recently raised the price it pays farmers to stop them from smuggling beans to neighboring nations for higher prices. However, the country’s lack of beans has also hampered its ability to secure funding that it uses to pay its growers.
One trader, who asked not to be identified, said their company would not buy any beans for the 2024-25 season from Ghana until issues over existing contracts have been resolved.
Ghana, the world’s No. 2 cocoa producer, secured an $800 million loan at the end of last year from a group of eight banks led by Cooperatieve Rabobank UA. COCOBOD doesn’t have enough beans to support the second and final $200 million drawdown from the commodity-backed facility, according to people familiar with the matter who asked not to be identified as the matter is private.
Ghana’s funding challenges come as the cocoa harvest for 2023/24 looks set to total about 422,500 to 425,000 tons, half the country’s initial forecast. Without COCOBOD payments, farmers won’t be able to afford the seedlings, chemicals, and fertilizers essential to a healthy crop.
By Eugene Davis
