Business News of Friday, 21 September 2018
The Ghana Cocoa Board has completed a 1.3 billion dollar syndicated loan agreement for cocoa beans purchases for the 2018/2019 crop season.
The agreement is with twenty one banks including Barclays Bank Ghana, Stanbic bank Ghana as well as Societe General.
The cocoa syndicated loan is to help the cocoa industry regulator make upfront purchases for cocoa beans that it purchases from cocoa farmers.
For this year, the Ghana COCOBOD is expected to pay an interest rate of about 2.5 percent.
This is because the libor rate which is the rate at which banks lend among themselves for September is estimated at 1.91 percent plus 6 basis points or 0.6 percent.
Speaking to the media after the signing ceremony in the Netherlands, the CEO of the Ghana COCOBOD, Joseph Boahen Aidoo touted the current administration’s achievement in crop yield.
“We had forecast 900,000 metric tonnes for the 2018/2019 crop season as we go in for the syndicated loan. For the 2016/17 crop year, we had 968,000 metric tonnes. Before this government came into power, crop output had dwindled to a region of about 740,000 to 778,000 metric tonnes. But for the just ended crop season, we had total output of 903,000 metric tonnes,” he said.
This is the second consecutive time that the Ghana COCOBOD has secured 1.3 billion dollars for its purchases since the 1.8 billion dollars secured in the 2016/2017 crop year.
The fluctuating world market prices of cocoa impacted the drop in amount secured for the just ended cocoa season.
But Mr. Aidoo tells Citi Business News his outfit will not be tempted to increase amount secured despite improvement in crop yield.
“When you syndicate, you collateralize cocoa for whatever amount you take. So when the price of cocoa is going down, you will be giving up more cocoa. Because world market price is continuing to fall, we need to tread cautiously…that is why we always go in for a manageable amount based on research by the Monitoring and Research Department of COCOBOD,” the CEO said.
The first draw down of about 650 million dollars is expected to hit the Bank of Ghana’s account by next two weeks.