Ghana to Restrict Specialty Cocoa Purchases For Next Crop Season Amid Ongoing Supply Concerns
Ghana is set to limit purchases of specialty cocoa for the upcoming 2024-25 season, underscoring persistent concerns over severe shortages that have disrupted the market and driven futures prices to record highs.
In a letter to buyers dated July 16, the world’s second-largest cocoa producer announced it will determine the volume of the next crop that can be sold as specialty cocoa based on total production. The Ghana Cocoa Board (COCOBOD) will allocate these beans “equitably” among buyers. Specialty cocoa includes beans certified by Fairtrade, UTZ, and Rainforest Alliance, as well as traceable beans.
The decision to restrict purchases indicates apprehension that the forthcoming crop may not see the recovery anticipated by some market observers, even with favourable weather and timely supplies of pesticides and fertilizers. Cocoa futures in New York, which surged to unprecedented levels this year, have since fallen over 30% after peaking in April.
“Volumes to be traded as specialty during the 2024-25 cocoa year will be determined as a percentage of total production and allocated equitably to registered buyers,” Emmanuel Opoku, deputy chief executive of operations at COCOBOD, stated in the letter seen by Bloomberg.
Ghana has deferred deliveries of at least 250,000 metric tons of cocoa to the 2024-25 season starting in October following a significant production decline. The country, alongside Ivory Coast, the world’s largest producer, has been grappling with the spread of swollen shoot disease.
Despite this, Ivory Coast projects its 2024-25 harvest to rebound to 2 million tons, up from an estimated 1.8 million tons for the current season. Ghana anticipates its production to reach 700,000 tons, a notable increase from approximately 425,000 tons.
COCOBOD has requested buyers seeking to purchase specialty cocoa for the next season to provide detailed information, including off-take agreements, shipment plans, and the specific amount and type of specialty beans they intend to acquire. The regulator will then allocate the approved tonnage for specialty cocoa to each registered buyer based on these submissions, Mr Opoku said.
A spokesman for COCOBOD did not respond to telephone calls and a text message seeking comment.
This measure underscores the challenges Ghana faces in managing its cocoa supply and the broader implications for global markets amid ongoing production difficulties.
with files from bloomberg…
