Ghana To Lose $1.2BN To Cocoa Operational Cost

Ghana’s Cocoa sector may not have any more time for feet-dragging as analysis by Publisher Business Desk reveals that Ghana would lose a whooping sum of $1.2 Billion by 2019, if the price of cocoa on the international market does not increase in favour of cocoa producing countries.

It is expected that this loss would be fuelled by the Ghana Cocoa Board (COCOBOD)’s inability to single-handedly pay for standard operation cost which includes the preparation of Cocoa beans for the international market.

The Head of Communications for Ghana Cocoa Board (COCOBOD), Mr Noah Amenya in an interview with Atinka FM on Thursday morning said, Ghana was currently losing an amount of $600 for every tonne of cocoa sold on the international market.

Juxtaposing this fact with the COCOBOD’s prediction of Ghana’s production level hitting two million metric tonnes by 2019 as against its present 968,000 metric tonnes, it is almost irrefutable that $1.2 Billion may go down the drain.

Defining The Loss

In explaining how this loss came about, Mr Amenya said, the international market price of cocoa which was at $3000 per tonne has dropped to $1,800 (GH¢7600) ―the same amount paid as producer’s price to farmers for a tonne of cocoa beans.

“This makes it difficult for the COCOBOD to have enough to pay for operational expenses,” he said.

“When you take the cocoa from the farmer, you have to dry it, the licensing company will standardise it, quality control will grade it and the transporter would take it to the warehouse. At the warehouse, there would be fumigation and other warehouse charges…we will have to pay for all,” he explained.

Mr Amenya continued: “Processing from the farmer to shipment cost $600. If the price of cocoa has gone so low on the market, we need to look for another $600 to take care of the handling of the cocoa before we can ship. For every tonne that is sold, Ghana loses $600.”

According to him, the COCOBOD is running at a budget deficit because the only way out is to borrow to make up.

“We have sat with government and we are discussing on how to deal with issue because cocoa is a very important crop for the Ghanaian economy,” Mr Amenya said.

Reduction of Cocoa Price Not Feasible

To correct this budget deficit, a faction of the public has asked for a reduction in producer price but Mr Amenya says that move would discourage the farmers especially the youth.

“People would withdraw…if the farmer does not get the price that would benefit him, he would definitely withdraw… the farmer would either lease the lands over to the galamsayers or give it to the rubber farmers and we don’t want that to happen.

“It would take a lot of discussions and convincing for the farmers to understand the need to reduce their prices. But until then we will need to borrow to be able to take care of the handling of the cocoa,” Mr Amenya said.

Storing Cocoa Beans?

Questions have been thrown at the COCOBOD― “can’t you just keep the cocoa until the prices are much on the international market and then you can sell?” Mr Amenya says it is almost impossible.

“Cocoa is an oil seed and so it has a short storage period particularly in the tropics. If we keep the beans for long they will go bad and incur more losses,” he says.

The only way out according to Mr Amenya is to process the cocoa to change its form.

“That can help us store it longer for other markets. Because there is excess in cocoa production, the Cocoa Processing Company (CPC) is thriving to expand its tertiary unit (confectionary) so that they produce more confectionary for the Ghanaian market,” he submits.

According to him, if companies partner with the COCOBOD at the tertiary level, Ghana would get more value for its cocoa.

By: Grace Ablewor Sogbey/ [email protected]