Ghana has about 50,000 metric tonnes of unsold cocoa sitting at its ports, cocoa market regulator Cocobod said, adding that it is in talks with farmers and the Finance Ministry on how to resolve the situation.
The world’s second largest cocoa grower is, like top grower Ivory Coast, struggling to sell its crop as global cocoa demand has fallen sharply, leading global prices CCc1 to halve over the course of a year to two-year lows of around $4,000 a tonne.
The farmgate price in Ghana, set anually by Cocobod, is 58,000 Ghana cedis a tonne or nearly $5,300, meaning traders face steep losses on Ghanaian cocoa purchases. Their purchases have dried up as a result, leaving farmers unpaid.
‘Serious Discussions’
“We’re having some very serious discussions. It’s a matter that government takes extremely seriously, and we want to resolve the issues as early as possible,” said Cocobod chief executive Ransford Abbey.
Abbey said the country has so far harvested just under 585,000 tonnes of the chocolate ingredient and sold some 530,000 tonnes, leaving around 50,000 unsold. He said the total crop is still expected to be around 650,000 tonnes this season.
Ghana’s Licensed Buying Companies or LBCs separately urged Cocobod on Thursday to urgently secure government funds to pay for approximately 300,000 tonnes of cocoa in order to “avert a deeper collapse of the country’s cocoa industry”.
Their much higher estimate of the stocks includes unpaid stocks at ports, unpaid beans held upcountry by LBCs, unpaid stocks still with farmers and future inventory expected from the March to August mid-crop harvest.
“I cannot vouch for the figure of the LBCs,” said Abbey.
Payments
Many Ghanaian farmers have not been paid for their beans since November, according to LBCs and farmer representatives. LBCs said some stocks held by farmers not yet bought were being stored in fertiliser bags which could affect the quality.
Some 800,000 Ghanaian families rely on cocoa for their livelihoods and the crop is a major foreign exchange earner for the country, accounting for some 15% of its export earnings.
Cocoa can be stored for only 6-12 months before losing quality in hot, humid countries.
Ghanaian authorities would need to secure $200 million of funding to buy the cocoa at current prices CCc1, according to Reuters calculations.
