Ghana’s cocoa regulator, COCOBOD, plans to borrow up to $1.5 billion by September to finance cocoa purchases for the 2024/25 season and address a decline in output, according to two sources familiar with the arrangement.
As the world’s second-largest cocoa producer, trailing only Ivory Coast, Ghana annually secures a syndicated loan to purchase cocoa beans from farmers. This loan is typically finalized at the beginning of the season in September. However, this year, the $800 million loan was delayed due to significantly lower cocoa output than expected.
COCOBOD has already withdrawn $600 million from this loan but canceled the remaining amount because the season’s cocoa output is projected to be nearly 40% below the forecast, making it impossible to secure the full loan.
According to one source, COCOBOD has issued a request for proposals to banks, indicating plans to borrow up to $1.5 billion for the next season. The banks and COCOBOD will determine an optimal loan amount. Another source expressed confidence that the syndication process would be successful.
At least one international bank has visited Ghana to inspect cocoa farms before making an offer, with another bank scheduled to visit next month.
Production is anticipated to rebound to 810,000 metric tons next season, according to the sources, who requested anonymity as they are not authorized to speak to the media. COCOBOD did not respond to a request for comment.
The current season’s cocoa production has suffered due to adverse weather conditions, disease, and smuggling, with output expected to fall almost 40% short of the target for the 2023/24 season. COCOBOD reported a loss of around 150,000 tons of cocoa beans due to smuggling and illegal gold mining, known locally as galamsey, during the 2022/23 season, with even greater losses anticipated this season due to rising global cocoa prices encouraging more smuggling.
The swollen shoot virus has devastated approximately 590,000 hectares of farmland between 2018 and 2024, according to COCOBOD. Despite these challenges, one source is optimistic that Ghana will achieve next season’s target of 810,000 tons due to improved weather conditions and the rehabilitation of cocoa farms.
Data from Ghana’s central bank revealed that cocoa export revenue dropped nearly 50% year-on-year in the first four months of this year.
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