Ghana Unlikely to Fulfill All Cocoa Contracts After Weak Harvest

Ghana Unlikely to Fulfill All Cocoa Contracts After Weak Harvest

Time Stamp: August 17, 2023 12:00 AM
Source Node: 2217754

Ghana, the world’s second-largest cocoa producer, is unlikely to be able to fulfill some of its crop contracts for a second season, adding to prospects of a global shortage.

Farmers in the West African nation are expected to see the lowest output since 2010 in the season that ends September 2023, missing official forecasts by nearly a quarter, according to people familiar with the matter. The shortage is forcing the industry’s regulator to postpone 44,000 metric tons of cocoa shipments to future seasons as it isn’t able to deliver on current contracts, they said.

The move would mark a further strain for global cocoa markets, which have seen prices soar in 2023 as extreme weather has crimped output among top producers. Ivory Coast, the world’s largest exporter, is expected to see its upcoming main-crop harvest shrink by nearly a fifth from 2022.

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While the Ghana Cocoa Board initially anticipated a 2022-23 crop of 850,000 tons, the actual harvest is now expected to come in at around 650,000 tons, weighed down by a lack of fertilizers, spraying chemicals and sales to neighboring Ivory Coast, where a stronger currency offers better returns for farmers, the people said. The regulator already rolled over about 40,000 tons of contracts last season, they added.

A spokesperson for the Ghana Cocoa Board didn’t immediately respond to calls and text messages seeking comment.

Output struggles among top producers are likely to put the world on track for a third consecutive supply deficit. Major chocolate manufacturers have warned they can’t rule out further price increases for consumers amid the increase in wholesale costs.

For Ghana, the issue comes on top of complications in its efforts to secure financing to purchase beans for the 2023-24 crop, reflecting concerns about the West African nation’s debt crisis. The Ghana Cocoa Board is seeking other avenues to raise funds for the impending season, which starts October 1.

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