GHANA- Ghana’s cocoa regulator, COCOBOD has announced plans to limit cocoa future purchases for the 2024/2025 season as a response strategy to dwindling cocoa production in the country.
The cocoa regulator sent a letter to registered buyers on June 19, revealing its intention to review current cocoa inventories and expected harvests and determine how much of the crop can be sold.
COCOBOD reiterated it would distribute beans equally to buyers, albeit prioritizing those with local processing licenses like UTZ, Fairtrade, and Rainforest Alliance.
The board has called on all buyers seeking to purchase the crop from the board to provide information such as take-off agreements, shipment plans, details on the amount of cocoa they require, and the type of specialty beans they may require.
The move to restrict some cocoa purchases indicates concerns within the board that the next harvest may not be sufficient to rebound from the current shortages. This is despite the regulator’s earlier predictions of a 700,000-ton harvest in the 2024/2025 season compared to current production estimates of 429,000 tons in the 2023/2024 season.
Emmanuel A. Opoku, COCOBOD’s Deputy Chief Executive, said, “Volumes to be traded as a specialty during the 2024-25 cocoa year will be determined as a percentage of total production and allocated equitably.”
“We will provide the approved tonnage for specialty cocoa for each registered buyer after submitting their projections for the season.”
Cocoa prices increased to an all-time high of US$12,260 per ton in mid-April owing to supply challenges, but they have since declined by more than 30%. Shortages are primarily caused by adverse weather conditions, swollen shoot disease, illegal smuggling, and mining in cocoa-producing areas in Ghana and Ivory Coast.
COCOBOD recently revealed that owing to these challenges, it intends to delay delivery of up to 350,000 tons of cocoa beans to the 2024/2025 season, which begins in October.
However, the board, Ivory Coast’s cocoa regulator, and market analysts have predicted the current price volatility will decline once next season’s harvest is realized. Ivory Coats’s regulator predicts the country’s cocoa output will rebound to 2 million tons in the 2024/2025 season, which should contribute to the relaxation of price volatility.
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