COCOBOD fails to secure $1.3bn syndicated loan in full over high interest rate
COCOBOD has failed to secure in full, the $1.3bn syndicated loan set for the 20222023 season.
Reports indicate that the inability of COCOBOD to secure the full loan amount, was due to an increase in the interest rate of the loan facility by some 25 basis points (0.25%).
Interest rate on the loan facility was hiked from 1.5% to 1.75% by the consortium of banks and financial institutions lending the amount to COCOBOD.
In view of the hike in the interest rate, COCOBOD settled for $1.13bn instead of the original $1.3bn loan amount.
The secured amount will be used to make cocoa beans purchases from farmers.
Cocoa production in Ghana is down sharply this year, seen at 689,000 tonnes on Sept. 1 after a previous forecast of 800,000 tonnes. This has prompted the International Cocoa Organization (ICCO) to upwardly revise its forecast for a global cocoa deficit.
The lower yields partially result from farmers using less fertilizer, with prices having increased worldwide due to high energy prices and supply disruption caused by Russia’s invasion of Ukraine.
Meanwhile, government has failed to announce a new cocoa farmgate price for the 2022/2023 crop season which begun October 1, 2022.
This is coming after Ivory Coast increased the fixed farmgate price paid to cocoa farmers by over 9% to 900 CFA francs ($1.33) per kilogramme, from 825 CFA francs for the main crop of the 2022/2023 season
Addressing a rally of cocoa farmers and other players within the value chain at Suhum in the Eastern region, Deputy Minister of Food and Agriculture, Yaw Frimpong Addo, expressed regret that the government’s Producer Price Review Committee was yet to agree on a new price for the season which will end in September 2023.
The cocoa farmers at the rally, report say, expressed unhappiness, amidst boos to register their displeasure.
However, the Deputy Minister assured that the committee was working assiduously to conclude on a new price that will be accepted by all stakeholders.
He is optimistic the price will be announced in the coming week or soon.
The last time the government increased the cocoa farmgate price was in 2020, when the price went up by 28%, from GHS 515 to GHS 600 per bag.
This was on the back of the implementation of the Living Income Differential, a price mechanism to eliminate farmer poverty.
