Ghana Could End 2023/24 Cocoa Season at 40% Below Target

Ghana’s cocoa output for the 2023/24 season is expected to be almost 40% below a target of 820,000 metric tons, two sources from the country’s sector regulator, COCOBOD told Reuters.

Strong seasonal winds and a lack of rain are among the main factors behind the shortfall, along with smuggling, damage caused by illegal gold mining, and swollen shoot disease.

“Unfortunately, the cause of the decline is not one that could be remedied immediately through human intervention,” the first source told Reuters, adding output for the season was now seen at around 500,000 tons.

In the 2022/23 season, COCOBOD said about 150,000 tons of cocoa was lost to smuggling and illegal gold mining, known locally as galamsey.

The regulator also said earlier this month that cocoa swollen shoot virus, which causes yields to drop and kills cocoa trees, had wiped off about 500,000 hectares of farmlands.

“Efforts are underway to address the problem. The rehabilitated farms will soon start fruiting, the rains have started and we are seriously collaborating with the security agencies to arrest the smugglers,” the first source said.

The second source added that Ghana still had a chance to recover from low production volumes.

COCOBOD was not available for comment.

Ghana’s production shortfall and similar deficits in Ivory Coast have been fueling historic surges in global cocoa prices as traders scramble for supplies, predicting ever-wider deficits this season and with concerns growing for the next.

On Thursday, London cocoa futures on ICE surged past the psychological 5,000-pound barrier while New York cocoa breached the $6,000 mark.

The surge in prices is filtering through to retail shelves, with chocolate makers like Hershey, expecting to see a further slowdown in demand for their products from cash-conscious customers.

The president of Ghana’s cocoa buyers group, Samuel Adimado, said the current output expectation was “shattering” and member firms were rationalising their operations to remain in business.

“We’ve not seen this kind of reduction in recent times. We’ve seen reduction in activity and downsizing where some staff have been reassigned and contract personnel sent home,” Adimado said.

The first source said rising global cocoa prices incentivised smuggling, losses from which could be higher this season.

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