Cocoa processing firms shutdown over acute bean shortage
In a startling development, some of Ghana’s prominent cocoa processors are facing a severe disruption in operations due to an acute shortage of cocoa beans, a critical ingredient in the country’s vital cocoa industry. Reports from Cocoa Post reveal that several grinders in the nation have been grappling with a dearth of cocoa bean allocations for months, prompting a temporary shutdown of processing plants.
Sources close to the matter paint a grim picture, emphasizing the severity of the situation. “The situation is terrible, no beans available,” stated an anonymous source, highlighting the unprecedented nature of the scarcity. The repercussions have compelled certain processing giants to suspend operations until a reliable supply of cocoa beans is restored.
As of Monday morning, January 22, 2024, independent checks indicated that despite the cocoa shortage, some processors in the Tema industrial Free Zones enclave were still operational, relying on existing stock. However, insiders predict that these facilities are on borrowed time, with an imminent cessation of activities looming.
Notable players in Ghana’s cocoa processing sector, including Barry Callebaut, Cargill, Olam, Cocoa Touton, Niche Cocoa, WAMCO, CHOCOMAC, and Cocoa Processing Company, which collectively contribute to approximately 40% of the country’s annual cocoa output, find themselves at the center of this unfolding crisis.
Industry watchers attribute the decline in cocoa production to a myriad of challenges, including adverse weather conditions, disease outbreaks, and the detrimental impact of illegal gold mining. These factors have collectively contributed to a consistent reduction in annual crop output over the past few years.
The concerns extend beyond production challenges, as some licensed buying companies (LBCs) face difficulties in obtaining payment from COCOBOD for previously delivered cocoa. This, coupled with COCOBOD’s struggles in securing its annual syndicated loan, has exacerbated the smuggling of cocoa out of the country, intensifying the economic strain on the industry.
Official forecasts by COCOBOD anticipate a production of approximately 800,000 metric tonnes for the 2023/24 season. However, industry insiders are less optimistic, projecting a harvest closer to 570,000 metric tonnes. Last year’s production shortfall led to Ghana defaulting on supply contracts for up to 44,000 metric tonnes, marking an unprecedented occurrence in the country’s history.
As the cocoa crisis unfolds, there are growing concerns that the industry’s woes may trigger personnel layoffs, exacerbating the economic challenges faced by one of the world’s leading cocoa producers. The situation remains fluid, with stakeholders closely monitoring developments in this critical sector of Ghana’s economy.
