Gov’t upbeat about cocoa target

Government has expressed its desire to support COCOBOD and believes the target of 900,000metric tonnes for the 2015/2016 crop year could be attained, based on the trend of cocoa production over the past ten years and good agronomic practices being adopted by COCOBOD.

The optimism from the state comes on the back of a disappointing cocoa production season with Ghana set to miss its production target 950,000metric tonnes for the 2014/2015 crop season.

A report from the Finance Committee of Parliament available to B&FT noted that a research from COCOBOD reveals that the country suffers decrease in production for at least two years following a bumper harvest.

It also came to light that from 2000-2001 and 2001-2002 crop seasons which fell from 1999/2000 production of 436,946.00 to 389,772.00 and 340,563.00 respectively before it increased again to 496,846.00 and 736,976.00 in 2002/03 and 2003/04 crop seasons respectively.

COCOBOD remains certain that with the trend coupled with the good agronomic practices such as timely supply of fertilizer and other chemicals and improved extension services, the projection of the 900,000metric tonnes was realistic and achievable.

Parliament on Wednesday approved a loan agreement between the Ghana Cocoa Board (COCOBOD) and a consortium of international and local banks for US$1.8 billion for the purchase of cocoa beans for the 2015/ 2016 crop season.

The chairman of the Finance Committee, James Avedzi is thrilled with the prospects of the loan facility disbursement which will focus on areas such as nursery and production, rehabilitation of over-aged and diseased trees, cocoa roads in all cocoa growing regions, farmers bonus, COCOBOD’s operations among others.

However, the actual disbursement in respect of the operational areas could not be given since they were yet to be determined by the Producer Price Review Committee.

The banks are Barclays Bank Plc, Commerzbank, Aktiengesellschaft, Deutsche Bank AG, Natixis, Standard Bank Group of South Africa and Sumitomo-Mitsui Banking Corporation.

Standard Chartered Bank is the arranger of the facility whiles the government of Ghana is the guarantor of the loan.

The facility is to enable COCOBOD to raise adequate funds to purchase cocoa beans from farmers through Licensed Buying Companies for the 2015 / 2016 cocoa season.

The sourcing of the facility also provides the nation with the opportunity to demonstrate its good track record on borrowing from the international finance market.

Cocoa production in Ghana has also increased significantly since the 1999/2000 crop season reaching am all time high of over 1 million metric tonnes in the 2010/2011 crop season.

The increase in the levels of production requires substancial financial resources to enable the Ghana Cocoa Board to finance the purchase of cocoa beans.

To this end the, the offshore syndicated Trade Finance arrangement was put in place in 1993 to enable the Ghana Cocoa Board secure a loan facility to finance cocoa purchases and for other payments each year.