{"id":191046,"date":"2024-06-19T18:20:34","date_gmt":"2024-06-19T18:20:34","guid":{"rendered":"https:\/\/www.ghanamma.com\/2024\/06\/19\/800000-tonnes-expected-this-year\/"},"modified":"2024-06-19T18:20:34","modified_gmt":"2024-06-19T18:20:34","slug":"800000-tonnes-expected-this-year","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2024\/06\/19\/800000-tonnes-expected-this-year\/","title":{"rendered":"800,000 tonnes expected this year \u2013"},"content":{"rendered":"

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Ghana\u2019s cocoa production volumes are expected to rise to about 800,000 tonnes by the end of the year in what is expected to reverse the trend of heavy losses suffered in the last couple of years.<\/strong><\/p>\n

The world\u2019s second-largest producer of the cash crop has been grappling with lower yields as a result of a number of factors such as El Nino, a severe global climate phenomenon that emerges from variations in winds and sea surface temperatures over the tropics; illegal mining (galamsey) and smuggling, leading to a drastic reduction in production output.<\/p>\n

Conservative figures put yields at an average of 500,000 in the last couple of years which is far lower than expected to generate the required for the state and to boost producer prices for farmers.<\/p>\n

As a result, Ghana has been suffering severe revenue losses because \u00a0of the lower yields at a time when the international capital markets have been shut to the government for over-borrowing, and taking the country\u2019s debts to unsustainable levels.<\/p>\n

Q1 revenue plummets<\/strong><\/h2>\n

For instance, the export value of cocoa products in the first quarter (Q1) of this year alone witnessed a significant decrease to US$592.2 million, representing a whopping decline of 32.8% compared to the same period in 2023.<\/p>\n

It also indicates a US$233.6 million loss in export revenue compared to the average for the past three years.<\/p>\n

The figure is also relative to the average of US$825.8 million for the first quarters of the last year years (2021, 2022 and 2023).\u00a0<\/p>\n

The worrying development is in spite of the fact that exports of cocoa products usually peak in the first quarter of the year.\u00a0<\/p>\n

\"\"\/<\/figure>\n

Exports of cocoa are dominated by beans. On average, beans which accounted for 56.2 per cent of cocoa exports in 2021, decreased to 51.4 per cent in 2022, and declined further to 46.5 per cent in 2023.<\/p>\n

The decline is driven by a collapse in exports of cocoa beans in Q3 of the past two years. In 2021, exports of cocoa beans didn\u2019t fall below US$225 million in a single quarter, but in 2022 and 2023 they reached lows of US$44.7 million and US$13.5 million respectively, according to the Q1 2024 newsletter trade report authored by the Ghana Statistical Service.<\/p>\n

Hope in sight<\/strong><\/h2>\n

But the Chief Executive Officer of Cocoa Board (Cocobod), Joseph Boahen Aidoo, said the difficult years were over and the country was expected to see production figures bounce back to appreciable levels.<\/p>\n

He was speaking briefly to the Graphic Business on his way out of an interview on an Accra-based radio station.<\/p>\n

\u201cWe expect to see significant rebound in production levels. It will not be up to a million tonnes as we would have expected but we are most likely to reach the 800,000 tonnes level\u201d, he said, demonstrating a lot of optimism.<\/p>\n

Price rebound<\/strong><\/h2>\n

Cocoa prices have been rising over many months with prices now above the $10,000 mark but according to the COCOBD\u2008CEO, Ghana is not able to benefit because of the forward sales the country had locked itself in.<\/p>\n

He however, noted that, the move by the government was not fatal describing the industry are unpredictable, hence the need for buyers and sellers to adopt strategies that ensures a win win.<\/p>\n

Meanwhile analysts have said, as the production levels rise, it will have an impact on the prices because the higher output will force prices back to their normal levels.\u00a0<\/p>\n

Impact on cedi<\/strong><\/h2>\n

Analysts have described the expected development as good news because of the impact it will have on the local currency.<\/p>\n

They said the higher the yields, the more foreign exchange the country will have to boost its foreign reserves, a phenomenon expected to cause speculation around the currency, which has been a major reason for the fast depreciation of the local currency, to drastically abate.<\/p>\n

Profit ways<\/strong><\/h2>\n

Earlier, the COCOBOD chief had hinted that after years of losses, COCOBOD posted a profit of about GH\u00a22 billion for the 2022\/2023 financial year.<\/p>\n

That, Mr Aidoo said, was in spite of the grave financial challenges the board faced from 2018, but noted that it was good news that eventually, COCOBOD has turned the corner to rake in more revenue for the industry.<\/p>\n

Advertisement<\/p>\n

\u201cToday, the industry has survived and COCOBOD today is healthy. In 2022\/2023, we made over GH\u00a22 billion in profit.\u201d<\/p>\n

\u201cCurrently, the account is at management level; once it passes through the board, it will be published and everybody will know. So we\u2019ve turned things around,\u201d he boasted with confidence.<\/p>\n

Losses over the years<\/strong><\/h2>\n

Reports indicated that COCOBOD posted a hefty loss of GH\u00a22 billion in 2021.<\/p>\n

However, Mr Aidoo offered an explanation, saying the loss was the result of a strategic decision to maintain farmer payments despite the organisation\u2019s financial strain.<\/p>\n

He maintained that it was a nationally prudent decision that COCOBOD maintained the producer price at the time although the prices on the international market had drastically plummeted and every cocoa-producing country including Cote D\u2019Ivoire dropped prices they paid farmers.<\/p>\n

\u201cThis is because we were torn between the national interest and the COCOBOD interest. The national interest here is the cocoa industry itself which deserved to be protected jealously at all cost.\u201d<\/p>\n

Describing the cocoa industry as Ghana\u2019s backbone and oxygen, the CEO noted that COCOBOD was therefore justified to prioritise national interest over COCOBOD\u2019s immediate financial interests to prevent further erosion of the cocoa farming sector.<\/p>\n

\u201cIf we had chosen the interest of COCOBOD, the only thing we could have done was to reduce the farmer\u2019s price at a time when illegal mining was about to explode, at a time when farmers were cutting cocoa in the Brong Ahafo Region to cultivate cashew; in the Eastern Region, farmers were cutting down cocoa to cultivate rubber. And we all know the Eastern Region has the best soils in Ghana to cultivate cocoa,\u201d he explained.<\/p>\n

He also revealed that the sector had been ravaged by adverse weather (El Nino), bean disease and illegal gold mining, which often displaces cocoa farms.<\/p>\n

To make matters even worse, Mr Boahene-Adu said Ghanaian farmers were also smuggling more beans to neighbouring countries such as Cote d\u2019 Ivoire to sell at higher prices than the state purchasing price, further eroding what little crop was available for delivery in Ghana.<\/p>\n

Thankfully, he said the harsh times were over and indicated that the fortunes of the sector looks good and that was good news for the country.<\/p>\n

<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

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