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Ghana’s Cocoa Regulator Plans $1.5bn Loan Amid Low Output

GHANA’S cocoa regulator, COCOBOD, will borrow up to $1.5bn by September to finance the 2024/25 cocoa purchases and compensate for low output, according to two COCOBOD sources. The world’s second-largest cocoa producer, after Cote d’Ivoire, relies on an annual syndicated loan to finance bean purchases from farmers, typically agreed upon at the start of the season in September.

However, this year’s $800 million loan faced delays due to low cocoa output. COCOBOD has withdrawn $600 million and cancelled the remainder as the season’s cocoa output is almost 40 percent below forecast, unable to guarantee the full loan. ‘A request for proposal sent to banks indicates COCOBOD will borrow up to $1.5bn next season. It is understood the banks are sizing it and together [with COCOBOD], they will decide on an optimal amount,’ one COCOBOD source told Reuters.


The second source expressed confidence in the syndication going through. ‘At least one international bank has visited Ghana to inspect cocoa farms before deciding on the offer, while another is scheduled to visit next month,’ the source added. Production is expected to recover to 810,000 metric tons next season, the sources stated, asking not to be named as they are not authorised to speak to the media.

Ghana’s cocoa production has been severely affected by adverse weather, disease, and cocoa smuggling, resulting in an expected output almost 40 percent below target for the 2023/24 season. COCOBOD reported losing about 150,000 tons of cocoa beans to smuggling and illegal gold mining (locally known as galamsey) in the 2022/23 season and anticipates greater losses this season due to global cocoa price increases incentivising more smuggling.

The swollen shoot virus has also devastated around 590,000 hectares of farmland between 2018 and 2024, according to COCOBOD. Despite these challenges, one source remains optimistic that Ghana will meet the next season’s target of 810,000 tons due to expected improved weather conditions and rehabilitated cocoa farms boosting output.

COCOBOD did not respond to a request for comment. Ghana’s cocoa export revenue fell nearly 50 percent year-on-year in the first four months of the year, central bank data showed this week.

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