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COCOBOD Turns To Domestic Borrowing To Pay Cocoa Farmers In Record Harvest

Ghana’s record cocoa production in a decade has necessitated additional borrowing from the domestic market to finance purchases.

As of June 3 2021, the world’s second-largest cocoa producer had recorded 965,493 metric tonnes in cocoa purchases.

The production so far outstripped a target of 900,000 metric tonnes for the 2020/21 crop year which ends in September 2021.

Cocoa farmers in sections of the country have complained about delayed payment for their produce while purchasing clerks were frustrated about hundreds of tonnes of yet to be purchased beans stuck in sheds.

Bloomberg reported Monday, Ghana Cocoa Board (COCOBOD) has sold a record GH¢11.7 billion ($2 billion) of six months cocoa bills between January and May 2021 to finance cocoa purchases.

The cocoa regulator normally borrows from abroad to in syndicated loans fund cocoa beans purchases.

But reports indicate that the 2020/21 production has exceeded the target, stretching the $1.3 billion syndicated loan that was raised at the beginning of the season in October 2020.

Deputy chief executive of COCOBOD, in charge of Finance and Administration, Ray Ankrah told Bloomberg that it has increased bill sales to help refinance maturing obligations.

All things being equal, the country may exceed the one million-ton mark, achieved in the 2010/2011 crop season.

Yields on the bills are falling, as traders speculate that the regulator will make more income from the bumper crop.

The ¢1.3 billion, 182-day securities issued at 17.65% on May 18, are currently trading at 15.65%.

Meanwhile, Mr Ankrah has given a hint of COCOBOD returning to international lenders for a $1.5billion syndicated loan for the upcoming crop year, as the country’s cocoa production enhancement programme is expected to continue paying off.

Kojo Hayford
Source Cocoa Post
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