Ghana's state-run cocoa regulator Cocobod will lose around $1.3 billion in revenue when it pays up for contracts rolled forward to the 2024/25 season due to poor output, President John Dramani Mahama said on Thursday, highlighting the impact of strong global cocoa prices on old contracts.
The world's number two cocoa producer delayed the delivery of 370,000 metric tonnes of cocoa from the previous season following a sharp drop in production. A global surge in cocoa prices made Ghana's 2024/25 crop pricier, incurring Cocobod losses when it uses this season's beans to service old contracts.
The cocoa sector regulator in Ghana has already lost $840 million from supplying 210,000 metric tonnes of the rolled over contracts as of February, Mahama told lawmakers in his state of the nation address.
Cocoa production in the West African nation peaked in 2021, with output of over 1 million tonnes of beans.
Rapid decline
But it has been in rapid decline ever since, hitting its lowest level in decades last season.
Analysts say climate change and tree disease are responsible, while many farmers also blame the government for failing to clamp down on wildcat gold mining that has destroyed large parts of the cocoa heartland.
Mahama, who took office in January, said the regulator could not supply 333,767 tonnes of cocoa, which it sold at $2,600 per tonne, rolling them over to the current season.
Cocobod did not respond to a request for comment.
Wasteful spending
"For every tonne of cocoa delivered this year in fulfilment of the rolled over contracts, Cocobod and the Ghanaian farmer would lose $4,000," Mahama said.
Beyond the amount lost, he said the regulator will lose another $495 million when it finishes supplying the remaining rolled over contracts, complicating its debt challenges.
Mahama earlier accused Cocobod of wasteful spending, blaming it of depleting cocoa production funds and depriving farmers of optimal prices. He told lawmakers a review showed Cocobod was "highly indebted."
"Its balance sheet indicates a total debt of 32.5 billion cedis ($2.1 billion), of which 9.7 billion is due to be paid at the end of September 2025."
Ghana expects improved yields this season on the back of good weather and the rebuilding of disease-infested farms.
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