Cocoa production declines

By Elorm Desewu

Ghana’s cumulative purchases of cocoa for the 2011/2012 main crop season has dropped by 15.6 percent compared to the 2010/2011 main crop season. For the 2011/2012 main crop season, Ghana recorded 864,403 tonnes of cocoa compared to 1,024,553 tonnes recorded for 2010/2012 main crop season.

The 2011/2012 light crop season purchases commenced in July this year and cumulative purchases from then to the week ending 14 September (8 weeks) came in at 65,668 tonnes, which was 39.1 percent lower compared with the first eight weeks of the 2010/2011 light season.

The Ghana Cocoa Board (COCOBOD) recently secured a US$1.5 billion pre-export finance facility from a conglomerate of international banks to purchase cocoa beans in the 2012/2013 cocoa season.

The facility was currently the largest non-oil deal in sub-Saharan Africa and was made possible by 31 banks from 17 countries in Europe, American and Asia. Some of the banks, including Standard Chartered Bank, Standard Bank and SG-SSB Bank, have local presence in the country.

The Ghana International Bank Plc acted as the initially mandated lead arranger (IMLA) with Standard Chartered Bank as the facility agent.

Cocoa prices continue to be dampened by lower European demand and a bumper crop from Cote d’lvoire. Concerns about demand in Europe – the world’s largest user of cocoa – amid the euro zone debt crisis add to negative sentiments to depress prices.

Over the period June-August 2012, the London International Financial Futures Exchange (LIFFE) weekly price development of cocoa witnessed significant fluctuations but, in trend, went up by 4.1 percent to £1,643 per metric tonne. The end-August price represented a year-on-year decline of 16.1 percent but a year-to-date growth of 17.3 percent.

In terms of the CSCE US$ price however, the end-August 2012 price was $2,441 per metric tonne and represented a weakening of 20.6 percent in year-on-year terms.

From Economy Times