Ghana Increases Spot Sales of Cocoa Amid Funding Shortfall for Upcoming Crop Season
Ghana seeks to increase spot sales of cocoa because it expects to raise less than half of its $1.5 billion target to fund the next crop season, officials said.
Spot, or uncollateralized, sales usually account for about 10% to 30% of overall sales of the key chocolate ingredient, Agriculture Minister Bryan Acheampong told reporters Thursday in the capital, Accra.
Ghana didn’t benefit from record cocoa prices this season because it committed most of its output to contracts negotiated when prices were much lower, said Acheampong. Cocoa futures reached more than $11,700 a ton in New York in April, surging more than threefold since the Oct. 1 start of the West African nation’s season.
“Let’s flip it to more uncollateralized sales,” he said.
The world’s second-biggest producer is struggling to reach a deal with foreign lenders such as Cooperatieve Rabobank U.A., Industrial and Commercial Bank of China and Mitsubishi UFJ Financial Group Inc. on a new syndicated loan, compromising the next season. For 32 years, Ghana has relied on these funds to pay for seedlings, chemicals and fertilizer, and buy cocoa farmers’ output.
Ghana Cocoa Board Chief Executive Officer Joseph Boahen Aidoo said earlier this month that the regulator was ditching plans of borrowing from foreign banks. Finance Minister Mohammed Amin Adam later clarified that loan syndication talks are ongoing, but are unlikely to raise more than $600 million.
Ghana typically produces about 850,000 tons to 900,000 tons of cocoa annually, but it has cut its target for 2024-25 to 650,000 tons because of bad weather, which has affected other crops including corn, and now threatens a food crisis.
To stave off a shortage of grain, Ghana plans to import 350,000 tons of corn and 75,000 tons of rice, Acheampong said Thursday.
