Smuggling of Ghana’s cocoa leads to fall in purchases
Ghana’s Cocoa Board bought 4.8 percent fewer beans from farmers so far this season because of cross-border smuggling to Ivory Coast that may result in annual output targets being missed, its Chief Executive Officer said.
The Accra-based board purchased 400,000 metric tons of beans from growers since the season began on Sept. 12, compared with 420,000 tons a year earlier, Tony Fofie said in an interview today in the city. The organization is targeting production of 600,000 tons by June, when the season ends.
“We believe that they are getting more money for the cocoa” in neighboring Ivory Coast, Fofie said of Ghanaian farmers. “The cross-border movement is what may stop us from meeting our targets.”
Ghana is the world’s second-biggest grower of cocoa, after Ivory Coast. Farmers in Ghana receive a fixed price of 1,632 cedis ($1,275) per ton for their cocoa, while in Ivory Coast, fewer controls and poorer-quality beans enable Ghanaian farmers to obtain more money for their product.
Smuggling hasn’t yet caused the Ghanaian board to revise its target for the season of producing 600,000 tons during the main harvest and a further 50,000 during the light crop that runs from June to September, Fofie said.
“We’re still sticking to our target, but there will be a review,” Fofie said.
Price Increase
The board also hasn’t decided whether it will increase the price buyers pay to Ghanaian farmers. In February last year, the board, known as Cocobod, announced a mid-season increase of 26 percent. The price was raised again in September.
Fofie said the board established a task force with customs officials to increase monitoring on Ghana’s western border with Ivory Coast.
Favorable rains in the western region, where 54 percent of Ghana’s cocoa is grown, may result in there being a large increase in the main crop, Fofie said.
“If you have the rains at those critical periods you are okay,” he said, without elaborating.
Fofie became head of Cocobod after former head Isaac Osei was elected to Ghana’s parliament in a December election.
Source: Bloomberg