It is emerging that Ghana, the world’s second-largest cocoa producer, may be unable to fulfil some cocoa contracts after a poor harvest, Bloomberg has reported.
Cocoa prices Wednesday posted moderate gains, with the New York cocoa futures climbing to a 1-week high on the back of the development.
Sources familiar with the situation told Bloomberg that farmers in Ghana are anticipated to harvest the least amount in 13 years during the season ending next month, falling short of official projections by almost a quarter.
According to them, the shortfall is preventing the industry’s regulator, Ghana Cococa Board, from fulfilling current contracts and forcing it to postpone the supply of 44,000 metric tons of cocoa for future harvests.
The decision would put additional pressure on the world’s cocoa markets, where prices have increased this year due to extreme weather, which has reduced output among leading growers.
The 2024 main-crop harvest in Ivory Coast, the greatest exporter in the world, is predicted to decrease by about a fifth from the previous year.
The actual harvest is now expected to be around 650,000 tons, down from the initial estimate of 850,000 tons by the Ghana Cocoa Board, which was hampered by a lack of fertilizers, spraying chemicals, and sales to the neighbouring Ivory Coast, where a stronger currency offers better returns for farmers, the sources said.
They said that the regulator had already renewed around 40,000 tons of contracts during the previous season.
Leading producers’ output problems will probably put the globe on track for a third consecutive supply shortfall.
Major chocolate producers have cautioned that, given the rise in wholesale costs, they cannot rule out further consumer price hikes.
The problem for Ghana comes on top of difficulties in trying to secure funds to buy beans for the crop in the years 2023–2024, highlighting worries about the debt crisis in the West African country.
The Ghana Cocoa Board is looking for additional methods of funding the upcoming season, which begins on October 1.
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