The Minister for Finance has outlined the major factors behind the ongoing crisis in Ghana’s cocoa sector, citing uncompetitive pricing, liquidity constraints at COCOBOD, and a historic production shortfall.
According to the Minister, Ghana’s cocoa has become unattractive to international buyers due to price disparities.
“The current situation is largely driven by the unwillingness of buyers to purchase Ghana’s cocoa because it has become uncompetitive,” he stated.
“Cocoa from other producing countries is now selling at prices significantly lower than the producer price of Ghana.”
He explained that COCOBOD also struggled with serious liquidity challenges, particularly after the 2024/25 syndicated loan failed.
Under the interim financing model introduced at the time, buyers were made to finance cocoa purchases, a move that further weakened the Board’s flexibility in trading and hedging.
The Minister disclosed that COCOBOD’s financial difficulties date back to 2022, when its finances deteriorated significantly, leading to the restructuring of Cocoa Bills in 2023.
He added that for the first time, the annual syndicated loan experienced major delays, with the first tranche arriving four months into the 2023/24 season.
A major blow to the sector, he said, was the unprecedented production shortfall in the 2023/24 crop season.
“COCOBOD projected an output of 800,000 tonnes and committed 786,672 tonnes in contracts. However, actual production was 432,145 tonnes, a deviation of 45%, which is unprecedented,” the Minister revealed.
He noted that the shortfall resulted in rollover contracts of 333,767 tonnes at an average price of US$2,661 per tonne, leading to losses exceeding US$1 billion, funds that could have supported farmers and other stakeholders.
In 2024, COCOBOD was unable to repay the final tranche of its syndicated loan due in July and had to secure US$70 million in bridge financing from the Ministry of Finance to avert default.
The Board subsequently defaulted on that facility as well, a debt now inherited by the current management.
Source: myxyzonline.com
