Ghana To Delay More Cocoa Deliveries As Supply Crisis Worsens

By Reuters
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Ghana To Delay More Cocoa Deliveries As Supply Crisis Worsens

The world's second largest cocoa producer Ghana is looking to delay delivery of up to 350,000 tonnes of beans to next season due to poor crops, five sources told Reuters in a further worsening of the outlook for the global chocolate industry.

Chocolate makers around the world are raising prices for consumers after cocoa LCCc2 more than doubled in value this year alone following a third year of poor harvests in Ghana and Ivory Coast, responsible for 60% of global production.

The market had previously estimated Ghana would roll forward some 250,000 metric tonnes of cocoa, equivalent to about half its current crop. Cocobod, Ghana's cocoa regulator, said the country was looking to roll over 'some volumes, but not in those (350,000 ton) quantities'.

Cocoa Crop

The country's cocoa crop has been ravaged by adverse weather, bean disease and illegal gold mining, which often displaces cocoa farms.

Ghanian farmers are also smuggling more beans to neighbouring countries to sell them at higher prices than the state purchasing price, further eroding what little crop is available for delivery in Ghana.


Five sources with knowledge of the matter said Ghana pre-sold some 785,000 tonnes worth of beans for the current 2023/24 (October-September) season, but will likely only be able to deliver some 435,000 tonnes.

Ghana regularly sells one year forward about 80% of its crop - which usually totals 750,000-850,000 tonnes.

However, its crop fell to around 670,000 tonnes last season and is not expected to exceed 500,000 tonnes this season. Traders and the industry fear it might not rebound significantly next season either.

The International Cocoa Organisation expects global cocoa production will fall 10.9% to 4.45 million tonnes this season.


This means processors and chocolate firms will have to draw on cocoa stocks to fully cover their needs.

Forward Sales

The price rally is derailing a long-established mechanism for cocoa trade.

Authorities in Ghana use the average of their forward sales to set the minimum price at which traders can purchases cocoa from farmers the following season.

With some 350,000 tonnes of forward sold beans missing from this season's crop, Ghana is struggling with forward sales for next season, traders said. Two sources said the country has sold forward just 100,000 tonnes.


Sources said the 100,000 tonnes, like the 350,000 tonnes being rolled into next season, were sold at less than a half of current world cocoa prices, meaning Cocobod will struggle to increase farmer prices next season based on these sales.

Cocobod said forward sales were progressing as usual but declined to disclose volumes or prices.

Failure to raise prices will likely tempt farmers to further ramp up bean smuggling, grow other crops or sell more of their farms to gold miners, said the sources.

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