Ghana's 2022/2023 cocoa output expected to be lower by 11% than target -sources

Credit: REUTERS/ANGE ABOA

ACCRA, Sept 7 (Reuters) - Cocoa output from the world's second biggest producer Ghana for the 2022/2023 season is expected to be lower by around 11% than a target of 750,000 tonnes due to smuggling and illegal gold mining on farmlands, four sources told Reuters.

Ghana last week brought forward the closure of the 2022/2023 season by a month, and decided to start the 2023/2024 season on Sept. 8, a month earlier than usual, saying it needed to tackle disruptions in the internal marketing of cocoa.

Neither the government, nor the cocoa sector regulator the COCOBOD, provided details about the disruptions.

Two sources, one from the COCOBOD and the other from the state-run Cocoa Marketing Company (CMC), told Reuters that Ghana's cocoa output slumped due to increased smuggling to neighbouring Ivory Coast and Togo where the beans fetched higher prices.

Around 50,000 tonnes of cocoa was lost through smuggling, the sources said.

A director of a cocoa exporting company and a cocoa pod counter who both requested anonymity, said, however, that continuous illegal gold mining on farmlands in Ghana, known locally as galamsey, was to blame for Ghana's falling cocoa output.

"The smuggling to Ivory Coast and Togo has been minimal and cannot explain everything. The problem is deeper, and the galamsey are to be blamed," the director said.

2023/2024 SEASON

For the 2023/24 season which is expected to start on Friday, Ghana's cocoa regulator expects output to reach 800,000 tonnes, according to the COCOBOD source.

"Our projections are 800,000 tonnes for the new season. The weather conditions have been more favourable," the COCOBOD source said.

COCOBOD will be seeking $1.2 billion to finance cocoa purchases for the 2023/2024 season, compared with $1.3 billion it raised in the previous season, the COCOBOD source and a source from the CMC said.

"We are looking for around $800 million from the private bank consortium and $400 million from the private sector for the 2023/24 season. We are confident that, as usual, we will receive more than we need because we have the trust of investors," said the CMC source.

COCOBOD and Ghana's government did not respond to requests for comment.

The optimism from the Ghanaian regulator is not shared by exporters and pod counters, who forecast 2023/2024 output at between 650,000 tonnes and 700,000 tonnes due to the impact of galamsey mining who have been destroying hectares of cocoa plantations for the past three years.

"I am not as optimistic as the CMC and COCOBOD about this year's production. We have been observing a decrease every year for the past three years, and it is lasting because the plantations are entirely destroyed by gold miners," another director of a cocoa exporting company said.

"These plantations are not being replaced," the director added.

(Reporting by Ange Aboa in Abidjan, Maxwell Adombila and Christian Akorlie in Accra Writing by Bate Felix; editing by Grant McCool)

((bate.felix@thomsonreuters.com; +221 77 569 3192 Twitter: @BateFelix;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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